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A high-performance immobilized bacterial strain coated with magnetic iron oxide nanoparticles was used for Basic Blue 41 azo dye (BB 41 dye) decolorization. To create the coated bacterial strain, Raoultella Ornithinolytica sp. was isolated and identified under the accession number KT213695, then coated with manufactured magnetic iron oxide nanoparticles. SEM and SEM-EDX were used to characterize the coated bacteria and validate its morphological structure formation. The coated Raoultella Ornithinolytica sp. A1 (coated A1) generated a 95.20% decolorization for BB 41 dye at 1600 ppm starting concentration with an optimal dose of coated A1 5 mL/L, pH 8, under static conditions for 24 h at 37 °C. Continuous batch cycles were used, with BB 41 dye (1600 ppm) added every 24 h four times, to achieve a high decolorization efficiency of 80.14%. Furthermore, the metabolites of BB 41 dye biodegradation were investigated by gas chromatographic-mass spectrum analysis (GC-MS) and showed a less toxic effect on the bioindicator Artemia salina. Additionally, 5 mL/L of coated A1 demonstrated the highest decolorization rate (47.2%) when applied to a real wastewater sample after 96 h with a consequent reduction in COD from 592 to 494 ppm., (© 2022. The Author(s).)