Studies were aimed at developing a microbial process for removal of organic sulfur from fossil fuels using model organic sulfur containing compound like dibenzothiophene (DBT), which is believed to be found abundantly in structural matric of fossil fuels. For microbial isolation, different types of soil, sea sand, water, coal and oil sludge samples were collected from various locations. From these samples, 110 bacterial isolates of varying characteristics were screened for their dibenzothiophene (DBT) desulfurizing activity. Only isolate Eu-32, isolated from a soil sample taken from the roots of a Eucalyptus tree, displayed DBT desulfurizing activity. The Eu-32 isolate metabolised DBT to 2-hydroxybiphenyl (2-HBP), as detected by HPLC, and was also able to use other organic sulfur compounds as a sole sulfur source. Based on morphological, biochemical and molecular studies, it was found that this organism belonged to the genus Rhodococcus; with a maximum 95% identity to species in this genus for the partial sequence of the 16S rRNA gene. The structure and molecular mass of metabolites produced from DBT desulfurization were identified by GC-MS, indicating that this isolate followed 4S (sulfoxide-sulfone-sulfinate-sulfate) pathway for sulfur metabolism. However, a novel metabolite identified as biphenyl was also found as end product via a new proposed pathway in this study. The newly isolated Rhodococcus spp. (Eu-32) was used for biodesulfurization of fossil fuels i.e. coal and diesel oil. Shake flask studies were optimized for pH, pulp density, agitation speed and particle size using representative coal sample from Dukki, Baluchistan. The maximum desulfurization of 40% was achieved using coal particle size of 850μm with 10% pulp density, 30oC temperature, pH 7.0 at 180rpm in 15 days. For Dandot coal sample the total and organic sulfur contents were decreased by 32% and 40% respectively when compared to untreated coal under similar conditions. Moreover, the carbon contents and the calorific value (CV) of the biotreated coal were increased by 2.9% and 0.19% respectively. Similarly, biotreatment enhanced hydrogen and nitrogen contents of the coal as 3.9% and 9.9% respectively. Biodesulfurization of coal in 1L locally fabricated fermentor under controlled conditions resulted in a total of 15% decrease of total sulfur in 21 days. ix PhD thesis Nasrin Akhtar The Rhodococcus spp. (Eu-32) did not indicate considerable reduction of sulfur contents in case of experiments on diesel oil. In shake flask studies, only 6% decrease in total sulfur was observed. The Fourier Transform Infrared spectroscopic analysis of biodesulfurized diesel oil revealed that transmittance intensity of the sulphones, sulfonates, sulfates and sulfonic acids were slightly increased in the spectra of the biotreated oil sample validating a slight reduction of these molecules in the diesel oil. For the isolation and identification of C-S bond cleaving genes (dszABC genes) of Rhodococcus spp. (Eu-32), two types of primers (non-degenerate and degenerate) were used. Specificity of the PCR primers and sensitivity of the polymerase chain reaction were checked using a culture of Rhodococcus erythropolis IGTS8 as a positive control for these genes (gift from Dr. John Kilbane, USA). The dszA gene (494bp) of isolate Eu-32 showed that the most closely related sequence was from Rhodococcus erythropolis PR4 with 92% sequence identity to a putative FMNH-2 dependent monooxygenase. The dszB gene showed sequence homology with genome sequences of Rhodococcus species conferring different genes, while the dszC gene sequence (774bp) showed 100% homology with desulfurizing enzyme of Rhodococcus species. It was concluded that isolate Eu-32 is a unique and novel organic sulfur utilizing biocatalyst that desulfurized DBT through an extended sulfur-specific degradation pathway with the selective cleavage of C-S bonds. The genome components required for biodesulfurization activity are functional even present in highly divergent form as compared to desulfurizing genes, which have been documented by other workers. The newly isolated organic sulfur removal bacterium Rhodococcus spp. (Eu-32) could be effectively used for the removal of organic sulfur from fossil fuels, particularly from coal.