Dissolved oxygen (DO) is an imperative parameter of the activated sludge process (ASP) for wastewater bioremediation. The effect of DO on microbial communities and corresponding metabolic functions in wastewater bioremediation was investigated using next-generation analysis techniques in this study. Illumina-based whole genome sequencing was applied to analyze the composition of the microbial community along with their functional diversity in activated sludge systems operating at three different DO levels. Activated biomass was collected from lab-scale reactors maintained at 1, 2, and 4 mg/L DO levels. Metagenomes were sequenced on an Illumina platform and analyzed using various tools. Results revealed that Proteobacteria phylum and Pseudomonas, Nitrobacter, Thauera, and Alicyclipilus genera were abundant in all reactor samples. Despite distinct DO levels, the microbial communities were conserved and consisted of a common population forming the core group governing the metabolic functions. However, higher diversity was observed at functional level indicating that microbes evolve and adapt to serve their role in a typical ASP. Metabolic pathway related to benzoate dominated at 1 mg/L DO level, while pathways for degradation of aromatic compounds like phenol, toluene, and biphenyl via central metabolic pathway were found dominating at 4 mg/L DO level. Pathways corresponding to homogentisate, naphthalene, cresol, and salicylate degradation enriched at 2 mg/L DO level.