In this study, hydrodynamics and physiology of microorganisms were investigated in a new type membrane bioreactor, MHCR, which is a membrane coupled HCR (High performance Compact Reactor) having very high COD removal efficiency. The degree of interference caused by inserting a submerged membrane was evaluated quantitatively by measuring the air suction rate and overall oxygen transfer coefficient (k(L),a). Despite such interference, MHCR showed greater oxygen transfer efficiency than HCR under particular hydrodynamic conditions. Higher recirculation rate generally resulted in a higher turbulence and thus alleviated membrane fouling. When the recirculation rate was too high however, the microbial floes were broken by fluid shear and membrane permeability was decreased rapidly. All these results were elucidated through not only physicochemical but also microbiological factors.