Biosurfactants are ecofriendly substitutes for chemical surfactants. In this study, biosurfactant-producing bacterial strains were isolated from soil and water samples from textile industry sites. Extracted biosurfactants could reduce the surface tension values from 72 to 39.3 mN/m demonstrating that the biosurfactants achieved the critical micelle concentration. Stable emulsifications with diesel and vegetable oil showed an emulsification index ranging from 61.76% to 76.47%. The presence of both rhamnolipid and surfactin types of biosurfactants was confirmed from our isolates using FTIR, LC-MS/MS, and GC-MS/MS analyses. These biosurfactant-producing bacteria act on dyes and heavy metals present in textile wastewater and reduce their concentrations by either degradation or biosorption. After the reaction with biosurfactant-producing bacterial isolates, FTIR spectra confirmed the breakdown of some compounds and their conversion into intermediates. There was also a reduction in the concentration of metals in textile effluents, as shown by EDAX analysis. These novel bacteria can be scaled up for their use in water reclamation and recycled for regular industrial use.