Refinery wastewater treatment was performed using a novel submerged tubular ceramic membrane bioreactor (STMBR) with the oleaginous hydrocarbonoclastic bacterium Rhodococcus opacus. A membrane‐based flux study with the STMBR was carried out to assess the performance of the tubular ceramic membrane. Continuous experiments with the STMBR achieved a maximum chemical oxygen demand (COD) removal of 84 %, with an average flux of 0.4 × 10−3 m3m−2s−1. To further enhance the COD removal efficiency, two STMBR were operated under the optimum conditions. Complete COD removal along with 2.98 g L−1 biomass growth was achieved during two‐stage STMBR operation. Furthermore, a toxicity assessment of the permeate water established its reuse potential.