When treating municipal wastewater, the disposal of sludge is a problem of growing importance, representing up to 50% of the current operating costs of a wastewater treatment plant. Although different disposal routes are possible, anaerobic digestion plays an important role for its abilities to further transform organic matter into biogas (60-70vol% of methane, CH(4)), as thereby it also reduces the amount of final sludge solids for disposal whilst destroying most of the pathogens present in the sludge and limiting odour problems associated with residual putrescible matter. Anaerobic digestion thus optimises WWTP costs, its environmental footprint and is considered a major and essential part of a modern WWTP. The potential of using the biogas as energy source has long been widely recognised and current techniques are being developed to upgrade quality and to enhance energy use. The present paper extensively reviews the principles of anaerobic digestion, the process parameters and their interaction, the design methods, the biogas utilisation, the possible problems and potential pro-active cures, and the recent developments to reduce the impact of the problems. After having reviewed the basic principles and techniques of the anaerobic digestion process, modelling concepts will be assessed to delineate the dominant parameters. Hydrolysis is recognised as rate-limiting step in the complex digestion process. The microbiology of anaerobic digestion is complex and delicate, involving several bacterial groups, each of them having their own optimum working conditions. As will be shown, these groups are sensitive to and possibly inhibited by several process parameters such as pH, alkalinity, concentration of free ammonia, hydrogen, sodium, potassium, heavy metals, volatile fatty acids and others. To accelerate the digestion and enhance the production of biogas, various pre-treatments can be used to improve the rate-limiting hydrolysis. These treatments include mechanical, thermal, chemical and biological interventions to the feedstock. All pre-treatments result in a lysis or disintegration of sludge cells, thus releasing and solubilising intracellular material into the water phase and transforming refractory organic material into biodegradable species. Possible techniques to upgrade the biogas formed by removing CO(2), H(2)S and excess moisture will be summarised. Special attention will be paid to the problems associated with siloxanes (SX) possibly present in the sludge and biogas, together with the techniques to either reduce their concentration in sludge by preventive actions such as peroxidation, or eliminate the SX from the biogas by adsorption or other techniques. The reader will finally be guided to extensive publications concerning the operation, control, maintenance and troubleshooting of anaerobic digestion plants. (C) 2008 Elsevier Ltd. All rights reserved.