An indigenous strain of Rhodopseudomonas palustris strain B1 isolated from a rice noodle 'bihun' factory wastewater was selected for the utilisation and treatment of sago starch processing wastewater (sago effluent). Growth in 50% sago effluent was optimised. The growth and pigment production was enhanced by the use of tungsten lamps at 4000 lux. Growth of B1 was significantly stimulated by the addition of 0.1% yeast extract. Highest biomass concentration of 2.5 g/l with a pigment content of about 1.1. mg carotenoid per g cell mass was achieved after 96 h of growth in anaerobic-light culture system. It was observed that agitation of the culture system enhanced pigment production too. There was a 77% reduction in the Chemical Oxygen Demand (COD) of the sago effluent and therefore a cell yield of about 0.59 g cell/g COD was obtained. © 1997 Elsevier B.V. All rights reserved.