Olive mill wastewater (OMW) usually has to be diluted before biological treatment. In the present work seven strains of Penicillium isolated from OMW disposal ponds were tested for biomass production and biodegradation of undiluted OMW. Best results were obtained by using strain P4, which formed 21.50 g (dry weight) of biomass per litre of undiluted wastewater after 20 days of cultivation. This and other strains also carried out an outstanding reduction of the chemical oxygen demand (COD) and the phenolic content of OMW, as well as a pH raise. The process could be accelerated by agitation. OMW fermented with Penicillium P4 was devoid of its initial antibacterial activity against Bacillus megaterium ATCC 25848.