The present study investigates the formation of aerobic granular sludge in sequencing batch reactor (SBR) fed with palm oil mill effluent (POME). Stable granules were observed in the reactor with diameters between 2.0 and 4.0 mm at a chemical oxygen demand (COD) loading rate of 2.5 kg COD m(-3) d(-1). The biomass concentration was 7600 mg L(-1) while the sludge volume index (SVI) was 31.3 mL g SS(-1) indicating good biomass accumulation in the reactor and good settling properties of granular sludge, respectively. COD and ammonia removals were achieved at a maximum of 91.1% and 97.6%, respectively while color removal averaged at only 38%. This study provides insights on the development and the capabilities of aerobic granular sludge in POME treatment. (C) 2011 Elsevier Ltd. All rights reserved.