The aim of this study was to examine sludge granulation during the anaerobic treatment of pre-hydrolysed municipal wastewater. The pretreated wastewater had a total chemical oxygen demand (CODt) of 432 ± 20 mg/l, a soluble COD (CODs) of 259 ± 8 mg/l, volatile fatty acids (VFA) of 101 ± 9 mg/l and suspended solids (SS) of 94 ± 12 mg/l. Prior to entering the digester, the influent was supplemented with sucrose, which increased the total and soluble COD by 300 mg/l. An upflow anaerobic sludge bed (UASB) digester was operated at different hydraulic retention times (HRT) ranging from 26.7 h to 2.2 h, while the organic load rate (OLR) ranged from 0.9 to 7.3 kgCOD/m3·d. Sludge granulation was observed after day 150 of operation, at an HRT of 3.4 h, when small granules of less than 2 mm in size appeared. The granules had a weak structure and low density, with the specific methanogenic activity of the sludge being about 0.24 g CH4-COD/gVSS·d. After granulation, the digester performance was 57% CODt removal and 76% CODs removal for steady state operation at an HRT of 3.4 h and an OLR of 5.6 kgCOD/m3·d. WaterSA Vol.28(3) 2002: 307-312