The present study describes the beneficial effects of potential probiotic E. coli 16 (pUC8:16gfp) expressing Vitreoscilla hemoglobin (vgb) gene, associated with bacterial respiration under microaerobic condition, on gastrointestinal (GI) colonization and its antioxidant activity on carbon tetrachloride (CCl4) induced toxicity in Charles Foster rats. In vitro, catalase activity in E. coli 16 (pUC8:16gfp) was 1.8 times higher compared to E. coli 16 (pUC-gfp) control. In vivo, E. coli 16 (pUC8:16gfp) not only was recovered in the fecal matter after 70 days of oral administration but also retained antibacterial activities, whereas E. coli 16 (pUC-gfp) was not detected. Oral administration of 200 and 500 μL/kg body weight of CCl4 to rats at weekly interval resulted in elevated serum glutamyl pyruvate transaminase (SGPT) and serum glutamyl oxalacetate transaminase (SGOT) levels compared to controls. Rats prefed with E. coli 16 (pUC8:16gfp) demonstrated near to normal levels for SGPT and SGOT, whereas the liver homogenate catalase activity was significantly increased compared to CCl4 treated rats. Thus, pUC8:16gfp plasmid encoding vgb improved the growth and GI tract colonization of E. coli 16. In addition, it also enhanced catalase activity in rats harboring E. coli 16 (pUC8:16gfp), thereby preventing the absorption of CCl4 to GI tract.