Paracetamol is one of the most used pharmaceuticals worldwide, but due to its widespread use it is detected in various environmental matrices, such as surface and ground waters, sediments, soils or even plants, where it is introduced mainly from the discharge of wastewater and the use of sewage sludge as fertilizer in agriculture. Its accumulation in certain organisms can induce reproductive, neurotoxic or endocrine disorders, being therefore considered an emerging pollutant. This study reports on the isolation, from sewage sludge produced in wastewater treatment plants (WWTPs), of bacterial strains capable of degrading paracetamol. Up to 17 bacterial strains were isolated, but only two of them, identified as Pseudomonas stutzeri CSW02 and Pseudomonas extremaustralis CSW01, were able to degrade very high concentrations of paracetamol in solution as a sole carbon and energy source, and none of them had been previously described as paracetamol degraders. These bacteria showed the ability to degrade up to 500 mg L−1 of paracetamol in only 6 and 4 h, respectively, much quicker than any other paracetamol-degrader strain described in the literature. The two main paracetamol metabolites, 4-aminophenol and hydroquinone, which present high toxicity, were detected during the degradation process, although they disappeared very quickly for paracetamol concentrations up to 500 mg L−1. The IC50 of paracetamol for the growth of these two isolates was also calculated, indicating that P. extremaustralis CSW01 was more tolerant than S. stutzeri CSW02 to high concentrations of paracetamol and/or its metabolites in solution, and this is the reason for the much lower paracetamol degradation by S. stutzeri CSW02 at 2000–3000 mg L−1. These findings indicate that both bacteria are very promising candidates for their use in paracetamol bioremediation in water and sewage sludge.