Red mud (bauxite residue) is waste produced during aluminum extraction from bauxite ore with concentrated sodium hydroxide at elevated temperature in the Bayer process. The major components in the red mud are iron oxide, silica, un-reacted alumina and residual NaOH as Na2CO3 as well as alkali bound in the form of sodalite, ferrite etc. Red mud is a pollutant and has a deterrent effect on the environment and human health. It is necessary to reclaim such sites that are depleted of the nutrients due to industrial wastes. In the present study, indigenous bacteria from red mud pond were isolated and studied their effect on reduction of pH and also the promotion of growth of plants to rehabilitate the ponds. A nursery experiment was conducted by amending different substrates such as fly ash, topsoil, and gypsum and sewage sludge. Bacterial consortia, phosphate solubilizing fungus Aspergillus tubingensis were inoculated to these treatments and the alkali tolerant Bermuda grass was planted in the plots. After six months, the growth of the grass and soil characteristics was studied. Gypsum amended red mud showed maximum reduction of alkalinity (pH) and attained pH about 8.0, but the level of soluble ion in this treatment was relatively high as revealed by the measurement of electrical conductivity. Red mud amended sewage sludge and bacterial treatment had highest level of organic carbon, organic matter and available phosphorus. Red mud amended sewage sludge and bacterial treatment showed maximum metabolic diversity of bacteria on Biolog plates. The indigenous bacterial consortia played an important role in the growth promotion of Bermuda grass without any chemical amendment. The present study results showed that A. tubingensis and indigenous bacteria play an important role in reducing the pH of the red mud and also promote the plant growth, though bauxite residue is a poor substrate for plant growth because of very high pH, salinity and sodicity. This is the first report of amelioration of red mud using biological means in nursery, trial.