Aerobic granules can be formed in sequencing batch airlift reactors (SBAR) and sequencing batch reactors (SBR). Comparing these two systems, the SBAR has excellent mixing condition, but due to a high height-to-diameter ratio (H/D), there is no performance capability at full scale at the present time. This research examined a novel configuration of SBAR at laboratory scale (with a box structure) for industrial wastewater treatment. To evaluate chemical oxygen demand (COD) removal efficiency and granule formation of the novel reactor (R1), in comparison a conventional SBAR (R2) was operated under similar conditions during the experimental period. R1 and R2 with working volumes of 3.6 L and 4.5 L, respectively, were used to cultivate aerobic granules. Both reactors were operated for 4 h per cycle. Experiments were done at different organic loading rates (OLRs) ranging from 0.6-4.5 kg COD/m3.d for R1 and from 0.72-5.4 kg COD/m3.d for R2. After 150 days of operation, large-sized black filamentous granules with diameters of 0.5-2 mm and 2-11 mm were formed in R1 and R2, respectively. In the second part of the experiment, the efficiency of removal of a toxic substance by aerobic granules was investigated using aniline as a carbon source with a concentration in the range 1.2-6.6 kg COD/m3.d and 1.44-7.92 kg COD/m3.d in R1 and R2, respectively. It was found that COD removal efficiency of the novel airlift reactor was over 97% and 94.5% using glucose and aniline as carbon sources, respectively. Sludge volume index (SVI) was also decreased to 30 mL/g by granulation in the novel airlift reactor.