The morphological and structural characteristics of aerobic granulation were investigated in a sequencing batch reactor. Small granules consisting mainly of bacterial microcolonies first formed at an organic loading rate of 1.68 kg chemical oxygen demand (COD) m(-3) d(-1) and a minimal settling velocity of 9.6 m h(-1). Mycelial granules consisting of fungi and filamentous microorganisms formed as the minimal settling velocity increased to 18 m h(-1). Scanning electronic microscopic observations indicated that fungi formed the structural backbone upon which other microorganisms can attach and colonize. The attached organisms began to reproduce themselves and quickly fill up the spatial voids within the granules. When the organic loading rate of the reactor increased to 4.2 kg COD m(-3) d(-1), the granules exhibited a denser and more compact structure and bacteria with a variety of morphotypes, embedded in extracellular polymeric substances, dominated. When the aerobic filling time was extended from 5 to 30 min, the thick and compact granules were gradually shifted into a light and loose filamentous granular structure. The extension of the aerobic filling time eventually led to instability and the failure of reactor operation. (c) 2006 Society of Chemical Industry.