Complex oily wastewater from a food industry was treated in three different UASB reactors at different operating conditions. Although all three systems achieved fat, oil, and grease (FOG) and COD removal efficiencies above 80% at an organic loading of 3 kg COD/m3 x d, system performance deteriorated sharply at higher loading rates, and the presence of high FOG caused a severe sludge flotation resulting in failure. Initially, FOG accumulated onto the biomass which led to sludge flotation and washout of biomass. The loss of sludge in the bed increased the FOG loading to the biomass and failure ensued. Contrary to previous findings, accumulation of FOG rather than influent FOG concentrations or volumetric FOG loading rate was the most importantfactor governing the high-rate anaerobic reactor performance. The critical accumulated FOG loading was identified as 1.04 +/- 0.13 g FOG/g VSS for all three reactors. Furthermore, FOG accumulation onto the biomass was identified mainly as palmitic acid (>60%) whereas the feed LCFA contained only 30% of palmitic acid and 50% of oleic acid.