The performance of an innovative process, a microaerobic membrane bioreactor seeded with anaerobic granular sludge, was investigated for simultaneous removal of organic substances and nitrogen from domestic synthetic wastewaters. Total COD removal efficiency of more than 93% was achieved, unaffected by the changes in influent COD and HRT throughout the entire operation. Nitrogen was removed through the simultaneous nitrification and denitrification process. The N-removal rate of the system was 20-45 mg N L(-1)d(-1) at a nitrogen loading rate of 26-67 mg N L(-1)d(-1). Nitrification was the rate-limiting step. The average TN removal efficiency increased from 77% at a COD/TN ratio of 19.5 to 87% at a ratio of 7.7. The batch assay with granules can achieve 92% COD removal and 84% TN removal, whereas the COD and TN removal declined to only 84% and 67%, respectively, after the granules were homogenized. The microaerobic granules also remained at a relatively high methanogenic activity. The test results showed that cake layer resistance was the major resistance to the membrane filter.