Organochlorine pesticide residues continue to remain as a major environmental threat worldwide. Lindane is an organochlorine pesticide widely used as an acaricide in medicine and agriculture. In the present study, a new lindane-degrading yeast strain, Pseudozyma VITJzN01, was identified as a copious producer of glycolipid biosurfactant. The glycolipid structure and type were elucidated by FTIR, NMR spectroscopy, and GC-MS analysis. The surface activity and stability of the glycolipid was analyzed. The glycolipids, characterized as mannosylerythritol lipids (MELs), exhibited excellent surface active properties and the surface tension of water was reduced to 29 mN/m. The glycolipid was stable over a wide range of pH, temperature, and salinity, showing a very low CMC of 25 mg/l. Bio-microemulsion of olive oil-in-water (O/W) was prepared using the purified biosurfactant without addition of any synthetic cosurfactants, for lindane solubilization and enhanced degradation assay in liquid and soil slurry. The O/W bio-microemulsions enhanced the solubility of lindane up to 40-folds. Degradation of lindane (700 mg/l) by VITJzN01 in liquid medium amended with bio-microemulsions was found to be enhanced by 36% in 2 days, compared with degradation in 12 days in the absence of bio-microemulsions. Lindane-spiked soil slurry incubated with bio-microemulsions also showed 20-40% enhanced degradation compared with the treatment with glycolipids or yeast alone. This is the first report on lindane degradation by Pseudozyma sp., and application of bio-microemulsions for enhanced lindane degradation. MEL-stabilized bio-microemulsions can serve as a potential tool for enhanced remediation of diverse lindane-contaminated environments.