Conventional MBR has been mostly based on floc sludge and the use of costly microfiltration membranes. Here, a novel aerobic granule (AG)-mesh filter MBR (MMBR) process was developed for cost-effective wastewater treatment. During 32-day continuous operation, a predominance of granules was maintained in the system, and good filtration performance was achieved at a low trans-membrane pressure (TMP) of below 0.025 m. The granules showed a lower fouling propensity than sludge flocs, attributed to the formation of more porous biocake layer at mesh surface. A low-flux and low-TMP filtration favored a stable system operation. In addition, the reactor had high pollutant removal efficiencies, with a 91.4% chemical oxygen demand removal, 95.7% NH4+ removal, and a low effluent turbidity of 4.1 NTU at the stable stage. This AG-MMBR process offers a promising technology for low-cost and efficient treatment of wastewaters. (C) 2012 Elsevier Ltd. All rights reserved.