This study was conducted to test the efficacy of an indigenous white rot fungus Lentinus squarrosulus in degrading engine oil in soil. Flasks containing sterilized garden soil (100 g) moistened with 75% distilled water (w/v) were contaminated with engine oil 1, 2.5, 5, 10, 20 and 40% w/w concentrations, inoculated with L. squarrosulus and incubated at room temperature for 90 days. Levels of organic matter, pH, total hydrocarbon and elemental content (C, Cu, Fe, K, N, Ni, Zn and available P) were determined post-fungal treatment. Results indicate that contaminated soils inoculated with L. squarrosulus had increased organic matter, carbon and available phosphorus, while the nitrogen and available potassium was reduced. A relatively high percentage degradation of Total Petroleum Hydrocarbon (TPH) was observed at 1% engine oil concentration (94.46%), which decreased to 64.05% TPH degradation at 40% engine oil contaminated soil after 90 days of incubation. The concentrations of Fe, Cu, Zn and Ni recovered from straw/fungal biomass complex increased with the increase of engine-oil contamination and bio-accumulation by the white-rot fungus. The improvement of nutrient content values as well as the bioaccumulation of heavy metals at all levels of engine oil concentrations tested through inoculations with L. squarrosulus is of importance for the bioremediation of engine-oil polluted soils.