The biological treatment of a synthetic dairy wastewater containing high levels of oil and grease (200, 600 and 1000 mg/1) was investigated, using two identical UASB reactors. One reactor was fed with wastewater from an upstream enzymatic hydrolysis step and the other with raw wastewater. The hydrolysis was carried out at 35 degrees C for 14 h, using an enzyme preparation obtained through solid-state fermentation, presenting pronounced lipase activity. The reactors were continuously operated with each fat concentration. The performance of both reactors was similar up to the concentration of 600 mg/l. However, the benefits of the hydrolysis step became evident with the highest concentration (1000 mg/1). COD removals averaged 90% in the reactor fed with the hydrolyzed effluent and 82% in the control reactor. The results showed that UASB reactors are able to operate, even when fed with high levels of oil and grease in dairy wastewaters. (c) 2006 Elsevier Ltd. All rights reserved.