The design, characterization, and performance of a bioreactor-settler system that allows the partial biological oxidation of reduced sulfur compounds is described. The design incorporates the physical separation of the aeration from the bioreactor. The reactor has a dynamic flow zone and a static zone. Steady state thiosulfate-oxidizing cultures were established at different O-2/S2O32- molar ratios. At O-2/S2O32-molar ratios > 1.0, sulfate was the main product of the biological oxidation of thiosulfate, while below O-2/S2O32- molar ratios of about 1.0, formation of elemental sulfur was observed. The maximum sulfur formation (60%) was obtained at a molar ratio of 0.98. The elemental sulfur settled in the bottom of the bioreactor and was removed daily from the system. A recovery efficiency of 70% was obtained. The settled sulfur-biomass particles consisted of 90% sulfur and 6% biomass and had an average size of 150 p m and a sedimentation rate of 7.50 m h(-1). The hydraulic retention time (HRT of 2 min) of the medium in the aerator vessel showed an influence over the system performance due to the oxidation of thiosulfate and intermediates under the high oxygen concentration found in this vessel. (C) 2004 Society of Chemical Industry.