A halothermotolerant Gram-positive spore-forming bacterium was isolated from petroleum reservoirs in Iran and identified as Bacillus licheniformis sp. strain ACO1 by phenotypic characterization and 16S rRNA analysis. It showed a high capacity for bioemulsifier production and grew up to 60 degrees C with NaCl at 180 g 1(-1). The optimum NaCl concentration, pH and temperature for bioemulsifier production were 4% (w/v), 8.0, and 45 degrees C, respectively. Although ACO1 did not utilize hydrocarbons, it had a high emulsifying activity (E (24) = 65 +/- 5%) on different hydrophobic substrates. Emulsification was optimal while growing on yeast extract as the sole carbon source and NaNO3 as the nitrogen source. The efficiency of the residual oil recovery increased by 22% after in situ growth of B. licheniformis ACO1 in a sand-pack model saturated with liquid paraffin.