Oil sludge is one of the most commonly encountered pollutants in oil-production companies and causes serious problems for the environment. In the present study, a novel microbial-enhanced oil-sludge treatment technology is discussed. The technology was able to achieve self-cycle operation by producing the biosurfactant by Rhodococcus ruber Z25 during the biodegradation process of the total petroleum hydrocarbon (TPH) and employing it for recovery of the oil sludge. The initial TPH and moisture content were 507 g/kg and 12%, respectively. After the crude/biosurfactant-suspension (CBS) treatment, only 31 g/kg of residual TPH remained in the oil sludge and the oil-recovery efficiency achieved 93.88%. The residual TPH was degraded further by cultivation of Rhodococcus ruber Z25, and a total of 1.27 g/L of biosurfactant was produced. The treated oil sludge contained 1.4 g/kg of residual TPH, and the system in the present study produced no additional pollutant to the environment.