The bacterium Pseudomonas stutzeri SPM-1, obtained from textile wastewater dumping sites of Surat, Gujarat was studied for the degradation of the textile azo dye Procion Red—H3B. The optimization was carried on the phenanthrene enrichment medium followed by exposing it to variable environmental factors and nutritional sources. The complete decolorization of dye (50 mg/L) happened within 20 h of incubation at pH 8 and temperature 32 ± 0.2 °C under microaerophilic conditions. Decolourization was monitored with the shifting of absorbance peak in UV–Vis spectrophotometry and HPLC analysis. The physicochemical studies of effluent before and after the treatment revealed 85%, 90%, and 65% decline in BOD, COD, and TOC levels. The strain showed significant activities of azoreductase (95%), laccase (76%), and NADH-DCIP reductase (88%) at 12 h, 10 h, and 8 h of growth respectively indicating evidence for reductive cleavage of the dye. The changes in the functional groups were confirmed by the presence of new peaks in FT-IR data. GC–MS analysis helped in recognizing the degraded dye compounds thus elucidating the proposed pathway for degradation of Procion Red—H3B. The potential of the bioremediation process was concluded by a phytotoxicity test using two plants, Vigna radiata and Cicer arietinum. Our study demonstrates that the strain Pseudomonas stutzeri SPM-1 has rapid decolorization efficiency and holds a noteworthy perspective in industrial application for textile wastewater treatment.