Microbial fuel cell (MFC) with cost-effective aerobic biocathode was developed for further treatment of azo dye intermediates into less harmful products in a single system. The fate of electrons in MFC for azo dye decolourisation and bioelectricity generation were explored via a series of studies including the effects of azo dye concentration, organic loading, external resistance and hydraulic retention time. The addition of low concentration of New Coccine (NC) (25 mg/L) improved 17% of the power density to 20.13 +/- 0.37 W/m(3). The internal resistance decreased from 50 to 32 Omega. As dye concentration increases, the decolourisation efficiency maintained over 90% (200 mg/L NC), whereas, power density dropped to 10.83 +/- 1.21 W/m(3). The increase of NC to higher concentration hindered the bioelectricity production, as both anode and azo dye molecules were competing for electrons. More electrons were utilized for decolourisation than bioelectricity generation as decolourisation efficiency improved, but power density dropped with the increase of organic loading. Lower external resistance allowed greater electron transfer, thus it enhanced the overall power performance. Higher power density (15.12 +/- 1.12 W/m(3)) and normalized energy recovery (76 Wh/kg COD) were achieved at the lowest external resistance of 100 Omega. Both decolourisation and power performances were improved with 2 days HRT. The intermediate products from decolourisation and mineralization processes were identified, and the degradation pathway of NC has been proposed based on the UV-Vis, HPLC and GC-MS results.