In this study granular sludge taken from a denitrifying upflow sludge reactor was characterized. Denitrification rates were determined in batch tests with and without external carbon source addition and pH microprofiles of the granules were studied. The microbial community structure was also determined. The results showed that denitrification without carbon source addition occurs; however, the process rate was lower than with external carbon source. This suggests that bacteria use dead biomass and extracellular material in the granular sludge as a carbon source when readily available substrate has been exhausted and nitrate is still present. Microprofiles showed a slight pH decrease for denitrification without external carbon source addition, and an increase in pH when using nitrite as the electron acceptor. Microprofiles using acetate as the carbon source for denitrification showed a significant increase in pH. Clone sequences obtained were close to the species Vitellibacter sp., Denitromonas indolicum str. and Denitromonas aromaticaus sp.