This study was carried out to investigate the effects of seed sludge properties and the selective sludge discharge method on aerobic granulation in biological wastewater treatment. Small-loose flocs and larger-denser flocs were separated from raw activated sludge by sedimentation in a settling column. The two types of sludge were used as seed biomass in two laboratory batch reactors for the granulation experiment. A fixed daily sludge discharge ratio of around 10% of slow-settling sludge was applied to the two reactors. The results showed that aerobic granules could be formed in the reactors from both seed sludge of different structural and settling properties. The initial washout of small-loose sludge flocs during the start-up of the bioreactors did not appear to be a crucial factor for granulation. The key operating parameter was the daily discharge of relatively slow-settling biomass from the reactors. PCR-DGGE analysis showed insignificant differences between the bacterial communities of the mature granular sludge in the two reactors. It implied that continuous discharge of small and slow-settling flocs removed these competitors for substrate uptake from the system and hence made the substrate more available for large and compact flocs and granules. This selective sludge discharge facilitated the growth and accumulation of denser sludge in the reactor, leading to complete granulation. (C) 2010 Elsevier B.V. All rights reserved.