Application of sulphate reducing bacteria to remove toxic metal contaminants from environment is considered a cost-effective and valuable method. The purpose of this study was halophilic bacterial reduction of sulphate to remove iron and sulphate from very saline synthetic wastewater under anaerobic conditions to convert it to a chemical fertilizer for use in saline and alkaline soils. From samples collected from wastewater of cotton delinting factory, halophilic sulphate-reducing bacteria were enriched with lactate and sulphate in basal medium (Postage C) supplemented with 10% NaCl and 1% MgCl₂.6H2O. Three strains were isolated and maintained in pure culture. Strain HSR 973 which showed the highest NaCl tolerance (up to 10%) consisted of motile non-sporulating vibrioid cells and resembled the genus Desulfovibrio. However, on the basis of physiological differences to all described species of this genus, strain HSR 973 was described as a new species and named Desulfovibrio halophilus, sp. nov. This experimental study was conducted in a biological reactor at anaerobic conditions. The iron was introduced into reactor at 50 to 400 ppm. The rate of sulphate reduction and iron removal were studied at retention times of 24 hours or more. All parameters in 50 ml samples were analysed using the standard methods for experiments of water and wastewater. After the adaptation of bacteria at different concentrations of iron, the maximum iron and sulphate removal at the optimum retention time of 24 hours were recorded 85.35 % and 78.3 %, respectively. Sulphate concentration in samples decreased to less than 20% after 24 h retention time. The maximum production of H₂S at optimum operational conditions was about 228 ml/l. The results showed that the reduction of sulphate and iron biological precipitation by this method is acceptable. Alkalinity generated during the process can facilitate the system for treatment of acidic wastewater containing iron sulphate. The produced iron sulphide sludge was not suitable for use as a chemical fertilizer due to its lack of complete separation. However, the total sludge produced was able to be consumed in saline and alkaline soils for various purposes, including of pistachios growing in this area.