Highly conductive biocompatible graphene is synthesized using ecofriendly reduction of graphene oxide (GO). Two strains of non-pathogenic extremophilic bacteria are used for reducing GO under both aerobic and anaerobic conditions. Degree of reduction and quality of bacterially reduced graphene oxide (BRGO) are monitored using UV–vis spectroscopy, X-ray photoelectron spectroscopy, and Raman spectroscopy. Structural morphology and variation in thickness are characterized using electron microscopy and atomic force microscopy, respectively. Electrical measurements by three-probe method reveal that the conductivity has increased by 104–105 fold from GO to BRGO. Biocompatibility assay using mouse fibroblast cell line shows that BRGO is non-cytotoxic and has a tendency to support as well as enhance the cell growth under laboratory conditions. Hereby, a cost effective, non-toxic bulk reduction of GO to biocompatible graphene for green electronics and bioscience application is achieved using halophilic extremophiles for the first time.