A process scheme has been presented for treating the waste stream originating from bio-gas generation unit of distillery waste by wet oxidation after thermal pretreatment for membrane process. The objective was not only to make the stream suitable to meet futuristic standards but also to produce acetic acid. The pretreatment can achieve a 40% reduction in COD with 30% color reduction. The wet oxidation of pretreated waste was studied in the range of 180-225 degrees C and oxygen partial pressure 0.69-1.38 MPa. Kinetic studies were performed with and without catalyst. The overall kinetics of distillery waste obeyed a two step mechanism namely, the fast oxidation of organic substrate followed by slower oxidation of low molecular weight compounds formed such as acetic acid. Homogeneous ferrous sulfate is found to be a suitable catalyst to treat the waste effectively, which increases the performance of wet oxidation. While noncatalytic wet oxidation at 220 degrees C achieved a 60% reduction in COD during 120 mins with 95% color destruction, catalytic wet oxidation achieved this at 210 degrees C. Catalytic wet oxidation with FeSO4 increases acetic acid formation. Also, addition of trace amount of hydroquinone significantly increased the acid formation along with enhanced rates of COD destruction.