A new anaerobic digester design for the treatment of diluted (2% solids) flush dairy manure was evaluated. The new design was developed as an economic alternative for enhancing the performance of anaerobic lagoon systems in cold weather areas. The digester employed used automobile tires as fixed-bed media to improve bacteria retention. The digester was heated by steam injection and built underground to enhance insulation. The tires were sorted in a unique pattern for improving mixing and uniform temperature distribution. The system was tested on a pilot-scale. The treatment mechanism was explored by mathematical modeling. The observed treatment efficiency of the new design was comparable to that of conventional digesters operating at higher total solids concentrations (>4%). With a hydraulic retention time (HRT) of 17 days, the measured removal rates were 30-50% and 40-60% of TVS and COD, respectively. The new digester maintained longer solids retention time (SRT) as estimated using the model, supported by the observed thick biofilm formation and resistance to hydraulic overload. The model was used to analyze different operation scenarios varying both the organic and hydraulic loads. (C) 2008 Elsevier Ltd. All rights reserved.