This paper considers the design of a software sensor (or soft-sensor) for the on-line estimation of the biological activities of a colony of aerobic micro-organisms acting on activated sludge processes, where the carbonaceous waste degradation and nitrification processes are taken into account. These bioactivities are intimately related to the dissolved oxygen concentration. Two factors that affect the dynamics of the dissolved oxygen are the respiration rate or the oxygen uptake rate (OUR) and the oxygen transfer function (K(l)a). These items are challenging topics for the application of recursive identification due the nonlinear characteristic of the oxygen transfer function, and to the time-varying feature of the respiration rate. In this work, OUR and the oxygen transfer function are estimated through a software sensor, which is based on a modified version of the discrete extended Kalman filter. Numerical simulations are carried out in a predenitrifying activated sludge process benchmark and the obtained results demonstrate the applicability and efficiency of the proposed methodology, which should provide a valuable tool to supervise and control activated sludge processes.