The granulation process was examined using synthetic wastewater containing tetrachloroethylene (TCE) in a 2 liters laboratory upflow anaerobic sludge blanket (UASB) reactor. The anaerobic biotransformation of TCE was investigated during the granulation process by reducing the HRT and increasing the chemical oxygen demand (COD) and TCE loadings. Anaerobic unacclimated sludge and glucose were used Is seed and primary substrate, respectively. Massive initial granules were developed after 1.5 months of start-up, which grew at an accelerated pace for 7 months and then became fully grown. The effect of operational parameters such as influent TCE concentrations, COD and TCE loading, food to microorganism (F/M) ratio and specific methanogenic activity (SMA) were also considered during granulation. The granular sludge cultivated had a maximum diameter of 2.5 nun and SMA of 1.32 g COD (gTSS.day)(-1). COD and TCE removal efficiencies of 92% and 88% were achieved when the reactor was operating at TCE and COD loading rates of 30 mg (l.day)(-1) and 10.5 or (l.day)-1, respectively. This corresponds to HRT of 0.40 day and F/M ratio of 1.28 gCOD (gTSS.day)(-1). Kinetic coefficients of k (maximum specific substrate utilization rate), K. (half velocity coefficient), Y (growth yield coefficient) and b (decay coefficient) were determined to be 2.38 mgCOD (mgTSS.day)(-1), 108 mgCOD l(-1), 0.17 mgTSS (mgCOD)(-1) and 0.015 day(-1), respectively for TCE biotransformation together with glucose as carbon and energy source during granulation.