Textile industries considerably contributes to water pollution of adjoining surface water bodies which in turn remarkably alters biological, chemical and physical nature of the water bodies. In the present investigation, textile wastewater samples were collected from Common Effluent Treatment Plant (CETP), Pali, Rajasthan, to monitor the quality of effluent generated by CETP. Grab Sampling was carried out in the months of October-2011 and April-2012 in accordance with standard procedures (APHA, 1998).The objectives of present study were to assess the major physicochemical parameters like temperature, pH, colour, DO, BOD, COD, alkalinity, chloride, hardness, nitrate, phosphate, TS, TDS of inlet, primary clariflocculator, aeration tank and outlet .The second objective was to isolate and characterize the indigenous bacterial strains which would decolourise textile diazo dye from the above mentioned sites. A total of 10 bacterial strains were isolated and were screened for their dye decolourising efficacy. The preliminary screening was carried out by plate assay which exhibited clear zones around bacterial colonies. The final screening was carried out in screening broth supplemented with 200mg/l diazo dye under standard conditions of temperature (37�C), pH(7.2) and incubation period(48-72 hours). Dye decolurising efficacy of bacterial strains was expressed as decrease in absorbance (?max=495.5nm) from initial 1.213 to final 0.211,0.194.0.28 for Staphylococcus sp.(82.54%), Serratia sp.(84%) and Micrococcus sp.(76.57%)respectively.