A pure colony of a bacterium from contaminated soil was isolated by exploiting 3,6-dimethyl-1-keto-1,2,3,4-tetrahydrocarbazole, a novel carbazole derivative, having indole moiety as well as 3-methyl functionality both in aromatic and hydro-aromatic moiety, as a sole source of carbon and energy. Taxonomical studies, biochemical analysis, and 16S rDNA sequence analysis indicated that the isolated strain has close similarity with Pseudomonas sp. Thin-layer chromatography followed by HPLC and mass spectroscopic study indicates that the isolated Pseudomonas sp. STM 997 degrades 3,6-dimethyl-1-keto-1,2,3,4-tetrahydrocarbazole, and this strain may be useful in the bioremediation of environments contaminated by the compounds containing carbazole moiety with methyl substituents at various reactive sites. This study also provides an evidence in favor of the suggested biodegradation of 3-methylcarbazole to carbazole in plants.