Dairy wastewater contains high levels of organics and other pollutants. The present study was carried out to investigate the biodegradation process of dairy effluents using some locally isolated bacteria and fungi. Four different dairy effluent samples were collected from Obour and 6th October industrial cities, Egypt. Five bacterial species (Pseudomonas aeruginosa, Bacillus subtilis, Lactobacillus delbrueckii, Staphylococcus aureus and Enterococcus hirae) and three fungal strains (Alternaria sp., Fusarium sp. and Aspergillus sp.) were isolated from dairy wastewater samples, identified and used for biodegradation process. Bacterial and fungal consortia were prepared separately in the laboratory. Two-stages (aeration and filtration) laboratory scale model was designed. Rice straw and activated carbon layers were used as filtration media. Results indicated the great ability of both studied bacteria and fungi for removal of organics (biological oxygen demand removal percent were 78.7% and 74.7% for bacteria and fungi, respectively) and the improvement of the physicochemical quality (total suspended solids removal percent were 99.3% and 99.0% for bacteria and fungi, respectively) of the dairy effluent. The addition of rice straw and activated carbon increased removal efficiencies. Biodegradation of dairy wastewater depending on local microorganisms is an effective, cheap and eco-friendly technology.