Swimming bed combined with aerobic granular sludge as a novel technology for wastewater treatment was developed, which was on the basis of the biofilm process and activated sludge process, and results demonstrated notable performance of high-efficiency treatment capability and sludge reduction. Even when hydraulic retention time (HRT) was only at 3.2 h with average COD volumetric loading of 2.03 kg/(m3 x d) and NH4(+)-N of 0.52 kg/(m3 X d), 90.9% of average COD removal rate and 98.3% of NH4(+)-N removal rate were achieved. Aerobic granular sludge appeared with spherical or rod shape after 16 days operation. Mixed liquor suspended solid (MLSS) concentrations in the reactor reached 5,640 mg/L at the highest during operation period, and the average ratio of mixed liquor volatile suspended solid (MLVSS) to MLSS reached 0.87. Furthermore, microscopic observation of biofilm and aerobic granules revealed much presence of protozoa and metazoa on the biofilm and suspended sludge, and this long food chain can contribute to the sludge reduction. Only 0. 175 5 of sludge yields (MLSS/ CODremoved) was obtained in the experiment, which was only about 50% of the conventional aerobic processes.