The anaerobic reduction of azo dye Acid Orange 7 (AO7) was investigated in a continuous upflow packed-bed reactor (UPBR) containing biological activated carbon (BAC). Preliminary batch experiments using graphite proved the catalytic effect of using a solid electron mediator in the reactor. Before the start of continuous experiments, AO7 adsorption studies were done to control adsorption effects on initial decolorization rates. In a continuous UPBR-BAC system, high azo dye conversion rates were achieved during very short space times (tau) up to 99% in 2.0 min. In order to know which are the crucial and most influencing properties of BAC in AO7 reduction, other materials-graphite and alumina-with different properties were also tested in UPBRs. The results show that both electron-mediating capability and specific surface area of activated carbon contribute to higher reduction rates. Compared to other continuous and biological processes treating azo dyes, UPBR-BAC seems to be a very effective and promising system for anaerobic azo dye degradation.