Finding a sound ecological-based approach for the removal of petroleum hydrocarbons (PHCs) from petroleum oily sludge (POS) generated in oil refinery plants is still a challenge. This study investigated the removal of total petroleum hydrocarbons (TPHs) using bioaugmentated composting (BC) by hydrocarbon-degrading bacteria (HDB) and vermicomposting (VC) by Eisenia fetida, individually and in combination (BCVC). After isolating two native bacterial strains from POS prepared from an oil refinery plant in Iran, the degradation capability of their consortium was initially assessed in mineral Bushnell-Haas medium (MBHM). Then, the biodegradation rates of POS in the BC, VC, and BCVC treatments containing different concentrations of TPHs (5, 10, and 20g/kg) were determined by measuring TPHs before and after the biodegradation. The results showed that the consortium degraded 20-62% of TPHs contents of Kerosene (1-5%) in the MBHM after 7 days. After 12 weeks, the TPHs removal percentages in the BC, VC, and BCVC treatments were respectively found to be 81-83, 31-49, and 85-91 indicating the synergistic effect of bacteria and worms in bioremediation of POS. The PHCs biodegradation in the BC, VC, and BCVC experiments was fitted to 1st order model kinetics. The results of toxicity tests indicated that the values of the no observed lethal concentration (NOLC) and median lethal concentration (LC50) of TPHs were 2-5 and 14.64g/kg, respectively after 28 days of earthworm exposure. Morphological impairments such as swelling, coiling, and curling were observed when TPHs concentration was even lower than NOLC. The study verified the effectiveness of vermicomposting bioaugmentated with the indigenous bacterial consortium for POS bioremediation.