Oil sludge is a thick viscous mixture of sediments, water, oil and hydrocarbons, encountered during crude oil refining, cleaning of oil storage vessels and waste treatment. Polycyclic aromatic hydrocarbons (PAHs), which are components of crude oil sludge, constitute serious environmental concerns, as many of them are cytotoxic, mutagenic and potentially carcinogenic. Improper management and disposal of oil sludge causes environmental pollution. The adverse effects of oil sludge on soil ecology and fertility have been of growing interest among environmental scientist and an important consideration in the development of efficient technologies for remediation of contaminated land, with a view to making such land available for further use. Oil sludge can be treated by several methods such as physical, chemical and biological processes. The biological processes are mostly cost effective and environmentally friendly, as they are easy to design and implement, as such they are more acceptable to the public. Compost, the product of biological breakdown of organic matter is a rich source of hydrocarbon-degrading microorganisms such as bacteria and fungi. These microorganisms can degrade the oil sludge to less toxic compounds such as carbon dioxide, water and salts. Compost bioremediation, the application of composting in remediation of contaminated environment, is beginning to gain popularity among remediation scientists. The success or failure of compost bioremediation depends on a number of factors such as nutrients, pH, moisture, aeration and temperature within the compost pile. The bioavailability and biodegradability of the substrate to the degrading microorganisms also contributes to the success of the bioremediation process. This is a review on the biological remediation technologies employed in the treatment oil sludge. It further assesses the feasibility of using compost technology for the treatment of oil sludge, as a better, faster and more cost effective option.