The progress in industrialization everyday life has led to the continuous entry of several anthropogenic compounds, including dyes, into surrounding ecosystem causing arduous concerns for human health and biosphere. Therefore, microbial degradation of dyes is considered an eco-efficient and cost-competitive alternative to physicochemical approaches. These degradative biosystems mainly depend on the utilization of nutritive co-substrates such as yeast extract peptone in conjunction with glucose. Herein, a synergestic interaction between strains of mixed-culture consortium consisting of Rhodotorula sp., Raoultella planticola; and Staphylococcus xylosus was recruited in methylene blue (MB) degradation using agro-industrial waste as an economic and nutritive co-substrate. Via statistical means such as Plackett–Burman design and central composite design, the impact of significant nutritional parameters on MB degradation was screened and optimized. Predictive modeling denoted that complete degradation of MB was achieved within 72 h at MB (200 mg/L), NaNO3 (0.525 gm/L), molasses (385 μL/L), pH (7.5) and inoculum size (18%). Assessment of degradative enzymes revealed that intracellular NADH-reductase and DCIP-reductase were key enzymes controlling degradation process by 104.52 ± 1.75 and 274.04 ± 3.37 IU/min/mg protein after 72 h of incubation. In addition, azoreductase, tyrosinase, laccase, nitrate reductase, MnP and LiP also contributed significantly to MB degradation process. Physicochemical monitoring analysis, namely UV−Visible spectrophotometry and FTIR of MB before treatment and degradation byproducts indicated deterioration of azo bond and demethylation. Moreover, the non-toxic nature of degradation byproducts was confirmed by phytotoxicity and cytotoxicity assays. Chlorella vulgaris retained its photosynthetic capability (˃ 85%) as estimated from Chlorophyll-a/b contents compared to ˃ 30% of MB-solution. However, the viability of Wi-38 and Vero cells was estimated to be 90.67% and 99.67%, respectively, upon exposure to MB-metabolites. Furthermore, an eminent employment of consortium either freely-suspended or immobilized in plain distilled water and optimized slurry in a bioaugmentation process was implemented to treat MB in artificially-contaminated municipal wastewater and industrial effluent. The results showed a corporative interaction between the consortium examined and co-existing microbiota; reflecting its compatibility and adaptability with different microbial niches in different effluents with various physicochemical contents.