Textile wastewater contains huge quantities of nitrogen (N)‐containing azo‐dyes. Irrigation of crops with such wastewater adds toxic dyes into our healthy soils. One of the ways to prevent their entry to soils could be these waters after the dyes' biodegradation. Therefore, the present study was conducted to evaluate the impact of textile dyes on wheat growth, dye degradation efficiency of bacteria‐fungi consortium, and alleviation of dye toxicity in wheat by treatment with microbial consortium. Among dyes, Red‐S3B (3.19% N) was found to be the most toxic to germination and growth of seven‐day‐old wheat seedlings. Shewanella sp. NIAB‐BM15 and Aspergillus terreus NIAB‐FM10 were found to be efficient degraders of Red‐S3B. Their consortium completely decolorized 500 mg L−1 Red‐S3B within 4 h. Irrigation with Red‐S3B‐contaminated water after treatment with developed consortium increased root length, shoot length, root biomass, and shoot biomass of 30‐day‐old wheat seedlings by 47, 18, 6, and 25%, respectively, than untreated water. Moreover, irrigation after microbial treatment of dye‐contaminated water resulted in 20 and 51% increase in shoot N content and N uptake, respectively, than untreated water. Thus, co‐inoculation of bacteria and fungi could be a useful bioremediation strategy for the treatment of azo‐dye‐polluted water.