The application of zero-valent iron (ZVI) coupled with microorganisms, has gained considerable attention in recent years for eliminating recalcitrant organic matters from wastewater. Nevertheless, there are no general conclusions regarding the degradation mechanism and the operating variables. In this paper, sponge iron (SFe, a kind of ZVI) has been submerged to the activated sludge process to develop a biological sponge iron system (SFe-M). The treatment impact of SFe-M system on aniline (AN) wastewater under the optimal conditions was significantly better than that of the general activated sludge system. In the SFe-M system, the variation trends of hydroxyl radicals (center dot OH) production were consistent with those of Fe(II), and the hydrogen peroxide concentration was approximately twice as high as the sum of activated sludge system and the SFe system. Both SFe and microorganisms could induce Fenton-like reactions directly or indirectly. This contributed to the production of center dot OH that constantly attacked the benzene ring and the amino group. It resulted in some nitrogen in AN released in the form of ammonia ions. Moreover, microorganisms could also use the mass and electrons during the AN conversion process. The AN was eventually oxidized to carbon dioxide.