This study investigated biosurfactant production by the bacterial strain of P. aeruginosa gi |KP 163922| for a free and immobilized cells system using waste engine oil (WEO) as a substrate. The polyurethane foam (PUF) cubes (1 cm × 1 cm × 1 cm) were used as carriers for the immobilization. The batch experiments were performed in Erlenmeyer flasks and monitored at every 24‐h interval for both cell systems. The microbial population was counted using the plate count method, and the hydrocarbon degradation percentage was calculated to evaluate the bacterial activity. Surface tension was measured at regular intervals to ensure the presence of biosurfactants. The maximum reduction was 37 and 35 mN/m in a free and immobilized cells system. Immobilization of cells using PUF was found to be efficient in supporting bacterial growth, and after 48 h of incubation, the growth was 2.5 (±0.58) × 1011 CFU/mL. The chemical characterization using Fourier transform infrared (FTIR) spectroscopy confirmed the obtained product as rhamnolipid. Crude biosurfactant yield was found to be maximum in the case of the immobilized system, which was approximately 18 g/L. Scanning electron micrographs (SEM) of the used PUF cubes showed the strong adherence of biofilm to the cube surface and the potential of its reuse in multiple cycles. Gas chromatography–mass spectrometry (GC–MS) analysis confirms that the immobilized strain of P. aeruginosa exhibited superior biodegradation capabilities compared to free cells. Specifically, it was capable of reducing the concentration of polyaromatic hydrocarbons and converting more significant aliphatic compounds into metabolic byproducts such as alkanes, alkenes, cycloalkanes, and carbonyl groups.