The enzymatic activity of activated sludge was investigated with special emphasis on the localization of the enzymes in the sludge flee matrix. Activated sludge from an advanced activated-sludge treatment plant, performing biological N and P removal, was used. An enzymatic fingerprint was established using a panel of six different enzymes. The fingerprint revealed peptidase as the most dominating specific enzyme tested. By monitoring sludge bulk enzymatic activity over a 3-month period using fluorescein diacetate as an enzyme substrate, considerable variations in activity were observed even over short periods (a few days). The variation in esterase activity was to some extent correlated to the presence of humic compounds in the sludge, but not to the sludge protein content. Comparison of full sludge enzyme activity to the activity of a batch-grown sludge culture indicated that enzymes accumulated in sludge flocs. A large proportion of the exoenzymes were immobilized in the sludge by adsorption in the extracellular polymeric substances (EPS) matrix. This was demonstrated by extraction of EPS from the activated sludge using cation exchange. Contemporary to the release of EPS a very large fraction of the exoenzymes was released into the water. This showed that the exoenzymes should be considered to be an integrated part of the EPS matrix rather than as direct indicators of the microbial activity or biomass.