Two upflow anaerobic hybrid reactors treated lactose and a mixture of ethanol, propionate and butyrate, respectively, at a volumetric loading rate of 3.7 kg chemical oxygen demand (GOD) m(-3) day(-1), a hydraulic retention time of 5 days and a liquid upflow velocity of 0.01 m/h. Under steady-state conditions, the lactose-fed sludge had much higher (20%-100%) specific methanogenic conversion rates than the volatile-fatty acid (VFA)/ ethanol-fed sludge for all substrates tested, including VFA. In both reactors, a flocculant sludge developed, although a much higher content of extracellular polya saccharide was measured in the lactose-fed sludge [1900 mu g compared to 305 mu g uronic acid/g volatile suspended solids (VSS)]. When the liquid upflow velocity of a third, VFA/ethanol-fed reactor was increased to 0.5 m/h, granulation of the sludge occurred, accompanied by a large increase (200%-500%) in the specific methanogenic conversion rates for the syntrophic and methanogenic substrates studied. Granulation reduced the susceptibility of the sludge to flotation. Glucose was degraded at a high rate (100 mg glucose gVSS(-1) h(-1)) by the sludge from the third reactor, despite not having been exposed to a sugar-containing influent for 563 days.