The techniques used to reduce the amount of sulphur in fossil fuels before combustion, include physical, chemical and biological processes (Biodesufurization).Generally the biological process is based upon the breakdown of organo-sulfur compounds by potential microorganism having many advantages over the conventional chemical processes, which is performed under mild conditions with no harmful reaction products without affecting the octane number of the fuels. In this context a dibenzothiophene (DBT) degrading bacteria, which can use DBT as the sole source of sulphur was screened from soil contaminated with crude oil collected at the site of Chennai Petroleum Corporation Limited's refinery in Manali, Tamilnadu, India. This grampositive, aerobatic (rod shaped) bacteria with the ability to desulfurize DBT was identified as Bacillus sp. and designated as strain KS1. HPLC analysis and Gibbs assay were performed to determine the quantity of desulfurized product 2-Hydroxybiphenyl (2-HBP) in which, its concentration was increased to 0.11mM along with the degradation of DBT over a period of 7 days and the desulfurization trait was expressed at increasing levels during the exponential growth phase of the microbe and then declined in stationary phase. This isolate did not grow on Thiophene-2-carboxyllic acid taking as the sulphur source. The desulfurization activity of KS1 resting cells in a two-phase system was higher than that of in aqueous media.