The utilization of microbes has been suggested as an eco-friendly alternative to traditional chemical deinking in the recycling of used paper. The aim of this study was to decolourize inkjet ink and to achieve deinking of printed paper pulp using Pseudomonas sp. OWS1 isolated from extreme habitat. Initially the bacterial strains screened for inkjet ink decolourizing and deinking of printed paper pulp were isolated from oil-contaminated effluent water sample and were biochemically characterized. Decolourization of inkjet ink was optimized using various parameters such as pH, glucose concentration, and medium supplemented with 1% starch and 1% Tween 80, inkjet ink concentration, anaerobic and aerobic conditions and cell immobilization. Partial decolourization of the paper pulp was achieved within 5 days at 28 ºC. The immobilization of bacterial cells was effective in decolourization of inkjet solution within 2 days at 28 ºC. The isolate Pseudomonas sp. OWS1 has the ability to decolourize the well-known commercial dyes. Preliminary screening for extracellular enzyme was also done. The present investigation clearly demonstrated that decolourization of inkjet ink and deinking of printed paper pulp was more effective by using the culture Pseudomonas sp. OWS1. It also has a high potential to decolourize the well-known commercially available dyes.