Heterogeneous photocatalysis, as a technology for wastewater treatment, is a very attractive approach for treating low-concentration, high-volume fluids. The design and development of an appropriate photocatalytic reactor for conducting photocatalysis requires a study of the hydrodynamics of the reactor coupled with the intrinsic rate kinetics to achieve higher quantum yields and optimum photocatalyst requirements. An annular dual-function photocatalytic reactor operating in absorption (fixed-bed) and regeneration (fluid-bed) modes was constructed for the purpose of this study. A technique using radioactive particle and two gamma-ray cameras arranged perpendicularly to each other was used successfully to study the fluidized-bed behavior. This three-dimensional radioactive particle tracking (RPT) approach can enable the prediction of the amount of UV light a particle would receive during illumination, which decides the production rate of hydroxyl radicals and, in turn, the reaction rates. Also, CT scanning of the bed at various superficial velocities provides a tool for reliably and accurately predicting the bed voidage in a particular region of interest. Degradation experiments of model pollutant (phenol) were conducted with a pilot-scale reactor to evaluate its effectiveness. Adsorption of pollutant onto the catalyst and pollutant degradation with respect to various catalyst loadings were investigated. The economic viability of the reactor in comparison with other existing technologies is discussed in this paper.