Self-forming dynamic membrane bioreactor (SFDMBR) technology has drawn increased attention recently, especially for its potential application in anaerobic conditions to retain slow growing sludge in the system. To attain maximum sludge retention, quick development of a self-forming dynamic membrane (SFDM) is deemed necessary. A lab-scale upflow anaerobic sludge blanket (UASB) reactor with a side-stream anaerobic SFDMBR was used in this study to investigate the factors affecting the successful formation of a SFDM and identify the indicators of success. The SFDM formed successfully within 60 to 90 min to produce permeates of less than 10 NTU after system optimization. The short formation period and low permeate turbidity provide strong support for the potential of retaining a large amount of sludge in the UASB reactor. The thickness and wet density of the SFDM increased continuously with the decrease in surface area during the formation period. Extracellular polymeric substances (EPS) played an essential role in SFDM formation. Humic acid was the dominant EPS in the sludge, but it did not significantly affect the SFDM formation. Even though polysaccharides only represented 17% of the total EPS in sludge, it accumulated on the supporting material as a percentage of the total EPS increased significantly from 6.2% after 60 min to 10.8% after 720 min. Therefore, polysaccharides were the primary reason for the formation of the SFDM. beta-polysaccharides were more important because it mainly accumulated on the fiber of the supporting material.