Sludge reduction based on regulating substrate allocation between catabolism and anabolism as a strategy is proposed to reduce energy and chemicals consumption during wastewater treatment. The results indicated that a sludge reduction of 14.8% and excellent nutrient removal were simultaneously achieved in the low dissolved oxygen (LDO) activated sludge system with a hydraulic retention time of 24 h at 25 degrees C. Denitrifiers comprised nearly 1/4 of all microorganisms in the system. These denitrifiers converted NOx- to N-2 obtaining a lower biomass yield. The oxidoreductase activity proteins in the LDO sample was more than twice that of the normal DO sample, indicating that catabolism was stimulated by NOx- when replacing O-2 as electron acceptor. Less substrate was used for cell synthesis in the LDO system. Stable sludge reduction without extra energy and chemicals inputs was achieved by regulating the substrate allocation by inducing the bacteria to utilize NOx instead of O-2.