The LUMISTox toxicity test was employed to assess the removal of municipal wastewater toxicity during the biological treatment with activated sludge in the wastewater treatment plant of Thessaloniki, Greece. Possible associations of toxicity data with chemical parameters of organic pollution of wastewaters, namely BOD(5), COD, DOC, SS and persistent organic pollutants (POPs) were also investigated. Toxicity and chemical parameters were concurrently measured at three sampling points of the treatment plant, the entrance of the unit (raw wastewater, RW), the effluent of the secondary sedimentation tank (SSE), and the final sewage sludge (FS). Substantial reduction of toxicity was observed from RW to SSE (mean+/-S.D. of bioluminescence inhibition 36+/-9.4% and 13+/-4.0%, respectively) indicating removal of toxicants during primary and secondary clarification, also suggesting that a large part of the toxicity measured is attributed to the biodegradable fraction of the organic content of wastewater. Significant positive correlations were observed between % inhibition values and wastewater parameters (BOD, COD, SS). In sludge, correlations were in general poor. Negative strong correlation was observed between EC(20/15) and TOC suggesting that the organic content of sludge contributes to the toxicity measured. Toxicity was positively correlated with the concentrations of certain POPs in RW, while weaker negative correlations were observed in SSE. Correlations in sewage sludge were less significant. It was concluded that toxicity testing is a useful tool supplementing chemical analyses in the evaluation of the potential hazard from effluent discharges and disposal of waste sludge.