Considering that Zero valent iron (ZVI) is expected to create a favorable environment for methanogenesis, we developed a ZVI packed anaerobic reactor system with a hydraulic circulation to enhance the anaerobic granulation. The reactor was operated without the circulation first, but it displayed slow granulation and low stability as increasing influent COD. When the hydraulic circulation around the ZVI packing bed was conducted, the average size of granule grew from rapidly 247 mu m to 814 mu m in the following 15 d, while the granule growth was unobvious in a reference reactor without ZVI. The reason for the enhanced granulation with the circulation was ascribed that the reaction of ZVI was intensified, which was confirmed by the results that the circulation increased Fe2+ leaching and decreased the oxidation-reduction potential in the reactor. Meantime, Fe2+ increased production of extracellular polymeric substances, which benefited sludge aggregation. Fluorescence in situ hybridization test revealed that the abundance of methanogens of the sludge increased with applying the circulation. (C) 2010 Elsevier Ltd. All rights reserved.