In the literature there is little research on the anaerobic digestibility of lipids. In this study the anaerobic biodegradability of lipids in the form of a milk-fat emulsion was evaluated using a closed circuit, expanded granular sludge bed (EGSB) reactor. The result showed that 70% of the lipids were adsorbed on to the granular sludge within approximately one day and thereafter the remaining lipids were slowly converted to methane gas. After 26 days only 22% of the milk-fat COD was converted to methane. The biodegradation was due to the loss of colloidal COD. The adsorbed COD was for the most part not biodegraded. The poor biodegradation of milk-fat could be attributed to the limiting rate of liquefaction, as evidenced by the low hydrolysis constant, k(h), of 0.01 day(-1). In order to prepare the milk-fat emulsion an anionic surfactant, sodium dodecylbenzenesulfonate, was used. Anionic surfactants are reported as compounds toxic to methanogenic bacteria. A toxicity test was carried out to choose a subtoxic surfactant concentration in order to prepare an emulsion that after dilution would not present inhibition.