Aerobic granular sludge can be classified as a type of self-immobilized microbial consortium, consisting mainly of aerobic and facultative bacteria and is distinct from anaerobic granular methanogenic sludge. Aerobic granular technology has been proposed as a promising technology for wastewater treatment, but is not yet established as a large-scale application. Aerobic granules have been cultured mainly in sequenced batch reactors (SBR) under hydraulic selection pressure. The factors influencing aerobic granulation, granulation mechanisms, microbial communities and the potential applications for the treatment of various wastewaters have been studied comprehensively on the laboratory-scale. Aerobic granular sludge has shown a potential for nitrogen removal, but is less competitive for the high strength organic wastewater treatments. This technology has been developed from the laboratory-scale to pilot scale applications, but with limited and unpublished full-scale applications for municipal wastewater treatment. The future needs and limitations for aerobic granular technology are discussed.