Industries like petroleum refinery, soap and detergents, food and beverage, breweries etc produce  effluents that are discharged into the environment. Petroleum refining industries discharge usually contains high concentration of aliphatic and aromatic hydrocarbons, some of the which being water soluble and highly mobile, can easily reach the drinking water sources down streams discharge causing several health hazards. Present work was selected to evaluate the profile of bacteria and fungi isolate in  the petrochemical effluent. Work was carried out on biodegradation of petrochemical effluent using prototypical bacteria and fungi and synthesis of silver nanoparticles as a coating of bacteria and fungi. Petroleum effluent was collected from CPCL and silver nitrate from chemical company. The bacteria and fungi were isolated from the effluent and were used for treatment of the Petroleum effluent by adopting two methods i.e. Cell suspension and immobilized nanoparticle microbial cells. The results showed that drastic reduction in the physico chemical parameters of the effluent. This shows the efficacy of degradation by Ag nanoparticles coated on bacteria and fungi and may be a novel approach in field of bioremediation.