In this work, herbivorous fish Mugil cephalus has been cultured to secrete protein rich green slime, which helps nitrifying and oxygen tolerant denitrifying bacteria to grow and colonize. Four strains representing Alcaligenaceae family have been isolated from greenwater system and characterized using biochemical test, fatty acid methyl ester (GC-FAME) analysis, 16S rRNA and functional gene approaches. They were tested for an ability to nitrify ammonia and nitrite aerobically. Two strains showed notable nitrification activity, when grown in a mineral salts medium containing ammonium sulfate and potassium nitrite. Functional gene analysis confirmed the presence of nitrous oxide reductase ( nosZ ) gene showing that they have an oxygen-tolerant denitrification system. It has been proposed that Alcaligenes faecalis strains heterotrophically nitrify ammonia into nitrite via formation of hydroxyl amine, which is oxidized to nitrous oxide using oxygen or nitrite as electron acceptor. These results provide a possible advantage of having nitrification and denitrification capabilities in the same organism, which plays an important role in biological wastewater system.