Methane oxidation coupled to denitrification (MOD) was tested in a membrane biofilm reactor (MBfR) using methane gas as the sole electron donor. Nitrate reduction to nitrite was rate limiting, and CH4 was present in the effluent. Slow kinetics of methane oxidation by bacteria were the factors that led to slow kinetics and incomplete removals. Methylocystaceae contained the largest fraction (21%) of bacterial SSU rRNA genes, and Archaea were nearly absent. The functional metagenome included all the genes essential for aerobic methane oxidation (pmo, mdh, mtdB, folD, and fdh) and nitrate reduction to dinitrogen (nap/nar, nir, nor and nos), but not for reverse methanogenesis (mcr). The functional metagenome supports that Methylocystaceae conducted MOD in syntrophy with heterotrophic denitrifiers (e.g., Comamonadaceae and Brucellaceae), suggesting aerobic MOD. DO measurements, serum-bottle tests, and calculation of O-2 permeation bolster hypoxically aerobic MOD would mainly account for denitrification in the MBfR.