The effect of crude oil on the growth of legumes (Calopogonium muconoides and Centrosema pubescens) and fate of nitrogen-fixing bacteria in wetland ultisol was investigated using standard cultural techniques. The results revealed observable effects of oil on soil physico-chemistry, plant growth and nodulation as well as on densities of heterotrophic, hydrocarbonoclastic and nitrogen fixing bacteria. The effects however varied with different levels (0.5%, 1%, 5%, 10%, 15% and 20%) of pollution. Ammonium and nitrate levels were high in the unpolluted soil but decreased with increase in pollution levels. Nitrite was not detected in contaminated soil probably due to the reduction in numbers of nitrogen fixers, from 5.26 ± 0.23 × l0(6)cfu/g in unpolluted soil to 9.0 ± 0.12 × 10(5) and 2.2 ± 0.08 × l0(5) cfu/g in soils with 5% and 20% levels of pollution respectively. The contaminated soil also exhibited gross reduction in the nodulation of legumes. A range of 13-57 nodules was observed in legumes from polluted soil against 476 nodules recorded for plants cultured on unpolluted soil. The heterogeneity of the microbial loads between oil-polluted and unpolluted soil were statistically significant (p < 0.05, ANOVA). Positive significant relationships were observed between the levels of hydrocarbons and the densities of heterotrophic bacteria (r = 0.91) and that of hydrocarbon utilizing bacteria (r = 0.86). On the other hand, relationships between the densities of nitrogen fixing bacteria and total hydrocarbons content was negative (r = -0.30) while positive relationships were recorded between the densities of different microbial groups and treatment periods except at 15% and 20% pollution levels. The LSD tests revealed highly significant differences (p < 0.001) in the physiological groups of soil microorganisms at all levels of pollution. The results imply that crude oil seriously affects rhizosphere microbial growth in legumes. Among the bacterial species isolated, Clostridium pasteurianum, Bacillus polymyxa and Pseudomonas aeruginosa exhibited greater ability to degrade hydrocarbons than Azotobacter sp, Klebsiella pneumoniae and Derxia gummusa while Nitrosomonas and Nitrobacter had the least degradability. A continuous monitoring of the environment is advocated to prevent extinction of nitrogen-fixing bacteria and total loss of soil fertility attributable to petroleum hydrocarbon contamination in the Niger Delta ultisol.