A new type oxidation ditch, airlift oxidation ditch (ALOD), was designed based on the research about airlift reactors and fluidized beds. Three important functions: propulsion, oxygenation, and mixing, can be achieved simultaneously. The flow in this ALOD was simulated for the purpose of feasibility verification and preliminary design. The influences of the relative location of the clapboards, the distance between clapboard and surface, as well as the aerator array were discussed. A bench-scale reactor was built to test the performance of the ALOD. All results provide evidence for the potential use of ALOD in municipal wastewater treatment.