A novel device that combines physical separation methods with biotechnology to treat oily bilgewater is described. Laboratory and pilot-scale experiments were performed to examine the ability of this device, tradenamed PetroLiminator TM, to both separate free oil and biodegrade the dissolved or emulsified oil from shipboard bilgewater. Laboratory experiments were conducted to isolate and enrich bilge oil-degrading microorganisms. These microbes were grown in specially formulated liquid nutrients containing several hundred parts per million (ppm) of bilge oil as the sole carbon source. These cultures were inoculated into a laboratory-scale aqueous fixed-film bioreactor for determination of the required flow rate (i.e., hydraulic retention time) to remove ⋜99% of the petroleum hydrocarbons in the bilgewater. This information was incorporated into the design and operation of a 500 gal pilot-scale bioreactor installed aboard the 700 ft Cape Lobos MARAD motor vessel. The bioreactor was operated for 70 days processing more than 90 000 liters of petroleum hydrocarbon (PHC) contaminated bilgewater. The average PHC concentration in the untreated influent was 70 to 90 ppm. The TPH levels in all treated effluent samples analyzed were well below 15 ppm, the U.S. Coast Guard (USCG) limit for legal overboard discharge. In fact, the removal efficiencies for the system were greater than 99% with no operational or maintenance problems noted. A newer model was developed that incorporated a physical separation chamber (Stage 1) upstream of the bioreactor chamber (Stage 2) in order to minimize the oil load to the microbes. A series of tests was conducted that closely mimicked the USCG tests for oil/water separators (OWS). The results were dramatic. The PHC levels in the effluent were below 15 ppm in all samples analyzed for the specified flow rate. Based on these data, it is estimated that the subject system with a footprint of 6 × 5 × 5 ft (L × W× H) is able to treat up to 86 000 gal of oily bilgewater per month. This system was USCG and IMO approved in January 2000.