A novel method of two-phase anaerobic digestion where the acid reactor is operated at low pH 4.0 was proposed and investigated. A completely stirred tank acid reactor and an up-flow anaerobic sludge bed methane reactor were operated to examine the possibility of efficient degradation of lactate and to identify their optimal operating conditions. Lactate with an average concentration of 14.8 g/L was the dominant fermentative product and Lactobacillus was the predominant microorganism in the acid reactor. The effluent from the acid reactor was efficiently degraded in the methane reactor and the average methane yield was 261.4 ml/g COD removed. Organisms of Methanosaeta were the predominant methanogen in granular sludge of methane reactor, however, after acclimation hydrogenotrophic methanogens enriched, which benefited for the conversion of lactate to acetate. The two-phase AD system exhibited a low hydraulic retention time of 3.56 days and high methane yield of 348.5 ml/g VS removed. (C) 2016 Elsevier Ltd. All rights reserved.