Excessive emission of plant nutrients (such as nitrogen and phosphorus) into the water body can induce eutrophication. Therefore, how to control eutrophic water efficiently and economically is very important. In the paper, highly efficient aerobic denitrifying phosphorus removing J16 bacteria was isolated from the activated sludge of an aerobic bioreactor in Taiyuan municipal wastewater treatment plant by using the blue–white spot screening method, an aerobic phosphorus absorption test, nitrate reduction test, nitrogen removal experiments, and plate coating and streaking methods. Through 16S rDNA gene homology comparison and physiological and biochemical identification, the J16 strain was preliminarily identified as Escherichia coli, with a sequence similarity of 99%. The 16S rDNA sequence of strain J16 was submitted to GenBank (accession number: MF667015). The effect of temperature, pH, percentage of inoculum and phosphate-P (PO43−-P) concentration on denitrification and phosphorus removal efficiency was investigated through a single-factor experiment. The optimum conditions of the J16 strain for denitrification and phosphorus removal were as follows: 30°C, neutral or weak alkaline (pH: 7.2–8), and 3% of inoculum, respectively. The denitrification and phosphorus removal efficiency of strain J16 was the highest when PO43−-P and nitrate-N(NO3−-N) concentrations were 8.9 and 69.31 mg/L, and the removal were 96.03% and 94.55%, respectively. In addition, strain J16 could reduce phosphoric acid to phosphine (PH3) and remove some phosphorus under hypoxia conditions. This is the first study to report the involvement of Escherichia coli in nitrogen and phosphorus removal under aerobic and hypoxia conditions. Based on the above results, the strain J16 can effectively remove nitrogen and phosphorus, and will be utilized in enhancing treatment of nitrogen and phosphorus-containing industrial wastewater and phosphorus reclamation.