An internal loop airlift bioreactor containing chitosan-immobilized Sphingobium sp. P2 was applied for the removal of automotive lubricants from emulsified wastewater. The chitosan-immobilized bacteria had higher lubricant removal efficiency than free and killed-immobilized cells because they were able to sorp and degrade the lubricants simultaneously. In a semi-continuous batch experiment, the immobilized bacteria were able to remove 80-90% of the 200 mg L-1 total petroleum hydrocarbons (TPH) from both synthetic and carwash wastewater. The internal loop airlift bioreactor, containing 4 g L-1 immobilized bacteria, was later designed and operated at 2.0 h HRT (hydraulic retention time) for over 70 days. At a steady state, the reactor continuously removed 85 +/- 5% TPH and 73 +/- 11% chemical oxygen demand (COD) from the carwash wastewater with 25-200 mg L-1 amended lubricant. The internal loop airlift reactor's simple operation and high stability demonstrate its high potential for use in treating lubricants in emulsified wastewater from carwashes and other industries. (C) 2012 Elsevier B.V. All rights reserved.