Abstract Enhanced bioremediation is a favorable approach for petroleum pollutant cleanup, which depends on the growth of oil-eating microorganisms. In this study, we show that, by using the modified T-RFLP (mT-RFLP) methodology, one of the four major microbial populations derived from oil sludge has failed to propagate in MS medium supplemented with 2% yeast extract (YE). rDNA sequence-based analysis indicated that the four populations were Donghicola sp. CT5, Bacillus sp. CT6, Alcaligenes sp. CT10, and Pseudomonas sp. ZS1. Four purified strains grow well individually in MS medium supplemented with 2% YE, suggesting that ZS1 growth is antagonized by other strains. Co-growth analysis using mT-RFLP methodology and plate inhibitory assay indicated that ZS1 exhibited antagonistic effect against CT5 and CT6. On the other hand, co-growth analysis and plate inhibition assay showed that CT10 antagonized against ZS1. To investigate the potential compounds responsible for the antagonism, supernatant of CT10 culture was subjected to GC–MS analysis. Analysis indicated that CT10 produced a number of antimicrobial compounds including cyclodipeptide c-(L-Pro-L-Phe), which was known to inhibit the growth of Pseudomonas sp. Growth test using the purified c-(L-Pro-L-Phe) from CT10 confirmed its inhibitory activity. We further showed that, using both gravimetric and GC analysis, CT10 antagonism against the oil-eating ZS1 led to the diminishing of crude oil degradation. Together, our results indicate that bioremediation can be affected by environmental antagonists.