Pseudomonas aeruginosa strain OBP1, isolated from petroleum sludge, was used to produce biosurfactant from a modified mineral salt medium with 2% n-hexadecane as sole source of carbon. The crude biosurfactant was fractionated using TLC and HPLC. Using FTIR spectroscopy, H-1 NMR, and LC-MS analyses, the chemical structure of the purified fraction of crude biosurfactant was identified as rhamnolipid species. The LC-MS spectra show that monorhamnolipid (l-rhamnopyranosyl-beta-hydroxydecanoyl-beta- hydroxydecanoate, Rha-C-10-C-10) was produced in abundance with the predominant congener [M-H](-) ions for l-rhamnopyranosyl-l-rhamnopyranosyl-3-hydroxydecanoyl-3-hydroxydecanoate (Rha-Rha-C-10-C-10). Seven different carbon substrates and five nitrogen sources were examined for their effect on rhamnolipid production. Using n-hexadecane (20 g/l) as carbon substrate and urea along with (NH4)(2)SO4 (2 g/l each) as nitrogen source was found to be the best, with a maximum yield of 4.8 g/l. The biosurfactant reduced the surface tension of water to 31.1 mNm(-1) with a critical micelle concentration of 45 mg/l. The biosurfactant showed a better emulsifying activity against a variety of hydrocarbon and achieved a maximum emulsion index of 82% for diesel. The purified biosurfactant showed a significant antibacterial activity against Staphylococcus aureus at a minimum inhibitory concentration of 8 mu g/ml.