Oily sludge as highly hazardous solid waste poses a significant threat to human beings and the environment, urging the development of efficient and cost-effective treatment technologies while the bioremediation approach through microbial degradation holds great potential. In this study, a salt-tolerant and highly efficient petroleum hydrocarbon degrading strain SD was isolated from oily sludge and identified as Pseudomonas aeruginosa by 16S rRNA gene sequencing. The growth conditions and crude oil degradation performance of strain SD were characterized; the optimum growth temperature range was 30-35 oC and the salinity tolerance was up to 8%. The strain was able to rapidly grow and reproduce with petroleum hydrocarbon as the sole carbon source, and to metabolize biosurfactant rhamnolipid, prompting emulsification and dispersion of crude oil, and further oil degradation. For the crude oil with an initial dosage of 2%, the degradation rate of petroleum hydrocarbons reached 93.5% within 60 days, indicating a high degradation efficiency. Through the bioremediation experiment of oily sludge, it was found that for oily sludge with oil content of 4.25%, the degradation rate of petroleum hydrocarbons reached 92.01% within 40 days. The results demonstrated great potential for Pseudomonas aeruginosa SD towards industrial application in bioremediation of oily sludge.