Aerobic biological wastewater treatment at thermophilic (ca. 55 degrees C) temperatures notoriously produces biomass that flocculates poorly or not at all. Contrary to this, thermophilic aerobic biomass that settled well in sequencing batch reactors was cultured with sludge volume index (SVI) values as low as 60mL/g. A mixture of granular and flocculant biomass resulted when closed reactors were sparged with recirculated reactor headspace gas containing some air, whereas a conventionally aerated control reactor sparged with air alone contained dispersed growth that did not flocculate. Maximum granule diameter was from 1.2 to 1.9mm, and granule resistance to disintegration was comparable to aerobic mesophilic granules. Two bacteria were isolated and identified as Anoxybacillus flavothermus and Pseudoxanthomonas taiwanensis as determined by partial 16S rDNA sequencing. Anoxybacilli species are alkaliphilic or alkalitolerant, with the type species having an obligate requirement for carbonate, even when grown on glucose. We postulate that high alkalinity and CO(2) may select for a population of aerobic thermophilies that flocculates and granulates.