Wastewater with concentrated butyrate was treated in a 2.8 l UASB (Upflow Anaerobic Sludge Blanket) reactor at 37-degrees-C and pH 7.1-7.7. The process consistently removed 97-99% of COD for loading rates up to 31 g COD/l/day. Of all the COD removed, 94.5% was converted to methane; the average sludge yield was 0.037 g VSS/g COD. Conversion of acetate to methane appeared to be the rate-limiting step. Sludge granules had a maximum specific methane production rate of 1.57 g methane COD/g VSS/day, but were unable to degrade propionate. The granules were 1-2 mm in size and had a densely-packed skin layer which comprised two types of microcolony: one was composed of cocci with abundant extracellular polymer and the other was composed of two bacterial species in juxtapositioned syntrophic association. The interior was mainly composed of Methanotrix-like bacteria, a large number of which were entwined into rope-shaped aggregates.