Biodecolorization of the azo dye Orange G was investigated using a new strain of Candida cylindracea SJL6, isolated from freshwater samples of the Subaé river in Bahia state, Brazil. Strain SJL6 was identified as C. cylindracea on the basis of 26S rDNA region. The various parameters of dye decolorization and cell growth were studied, including the Orange G dye concentration (100 to 500 ppm), temperature (20 to 40 °C), glucose concentration (0 to 5%), and initial pH (3 to 8). Biotoxicity tests were performed using shrimp (Artemia salina) to determine the lethal concentration (LC 50 ) and onion bulbs (Allium cepa) to determine the cytotoxic and genotoxic effects of both Orange G dye and metabolites formed after decolorization. Up to 90% of decolorization of the Orange G dye at 500 ppm was achieved by C. cylindracea SJL6 at 30 °C, pH 3, and 1% glucose. However, the biotoxicity tests showed that there was increased toxicity after decolorization, suggesting partial Orange G dye degradation and production of toxic metabolites.