Gasification is an important option for the swift implementation of biomass combined heat and power processes in the Danish energy supply system. Tar-water produced by the gas-cleaning system of gasifiers may contain substances toxic to nitrifying bacteria. As the gasification plants are small and often located in the catchment area of small wastewater treatment plants, discharge of the tar-water may be critical for wastewater treatment plants operated with nitrogen removal. Tar-water from a full-scale updraft gasifier has been thoroughly examined with respect to inhibition of nitrification and the toxicity for nitrifying bacteria has been evaluated for the dominating constituents in the tar-water. Simple organic substances make up the dominating part of the organic matter but phenol and phenolic compounds are also present in significant concentrations. The identified substances are biologically degradable and it has been demonstrated that most of the organic matter together with the toxicity can be eliminated in an aerobic activated sludge process.