An oxic settling anoxic system coupled with an activated sludge process has been studied to reduce sewage sludge production. The reduction of sludge yield, excess sludge production and active biomass yield were 51.7%, 52.9% and 67.1%, respectively, compared with the control system. The oxic reactor of the oxic settling anoxic system, even with a lower active biomass concentration than the oxic reactor of control system, showed a higher metabolic activity in their active biomass. Diversity and crawling ciliates group have been shown as promising bioindicators of active biomass yield reduction. The identification of floc-forming bacteria in the control system suggested that oxic settling anoxic system will improve settling properties compared to a Conventional Activated Sludge process.