A laboratory study has been conducted to assess the performance of Hybrid Upflow Anaerobic Sludge Blanket (HUASB) Reactor in treating paper mill effluent. The hydraulic retention time (HRT) is maintained at 12 h. The organic loading rates (OLR) are calculated on the basis of COD inlet in the reactor for different flow rates and the maximum OLR is found to be 12 kg COD/m(3).d. The maximum reduction of TCOD and SCOD is found to be 92 and 88% respectively. The maximum biogas production is 4.85m(3)/m(3).d. The hybrid up flow anaerobic sludge blanket reactor is found to be develop granules in two different inoculum sludges in early granulation and start-up has been studied. The study reveals that earlier start-up and granulation of biomass can be achieved using mixed sludge (cow dung and effective microorganisms (EM)). Scanning electron microscope (SEM) study of the granules shows predominance of Methanosarcina and Methanothrix type of species on the surface of granules. The process efficiency and biogas production is found to be increased with an increase in the organic loading rate. Methanobacterium and Methanosaeta bacteria were dominant at the end of start-up whereas Methanosarcina, cocci and rods are predominant at the end of performance studies. The size of the granules is 1 to 3 mm and exhibite good settleability. Residence time distribution (RTD) study show mixed regime flow behaviour at the end of performance study. Dispersion numbers greater than 0.2 show the reactor attained ideal mixed flow regime.