This paper describes the experiments and observations that examine the mechanisms by which the addition of powdered activated carbon (PAC), in the form of biologically activated carbon (BAC), improves the filtration performance of a submerged membrane bioreactor (MBR). The membrane performance was observed to increase significantly with steady state PAC concentration. It is necessary to steadily replenish the PAC, to match that which is lost in sludge wastage. The enhancement mechanisms identified are, first, the role of PAC as an adsorbent of organics and planktonic bacteria, second, the effect of PAC as a scouring agent that limits foulant deposition, and third, the effect of the combined adsorption and biodegradation of BAC on the foulant components. The effectiveness of each mechanism in decreasing the fouling rate has been carefully evaluated. All three mechanisms play a role and the most significant appears to be the combined adsorption and biodegradation effect. The properties and filtration characteristics of activated sludge, with and without BAC have been measured and compared in both short-term tests and long-term continuous operation runs. The results of the short-term (cross flow mode) tests are in qualitative agreement with long-term performance.