Oil degradation agent was developed with organic sludge and modified peat moss (MPM) to recover oil contaminated soil. Waste sludge discharged from wastewater treatment plant of chemical plant in Ulsan National Industrial Park was used as organic sludge, and MPM was purchased. Organic sludge was adequate to use as growth medium for microorganism, the surface of MPM had porous structure which could enhance the cultivation condition of oil degradation microorganisms. Water contents and TPH variation with time were observed to investigate the degradation capacity of developed degradation agent. Water contents were rapidly decreased with higher contents of MPM, however, in case of TPH, high MPM content decreased the degradation capacity. Therefore, it was recommended that the content of MPM was controlled to below 10% in degradation agent as mixing organic sludge with MPM.