The treatment performance of an upflow microaerobic sludge blanket reactor (UMSB) for synthetic domestic wastewater was investigated at two dissolved oxygen (DO) levels, 0.3-0.5 and 0.7-0.9 mg l(-1), focusing on nitrification performance. The higher DO level induced complete nitrification of ammonia nitrogen (NH3-N), achieving chemical oxygen demand and NH3-N removals of 97 and 92%, respectively. There were consistently significantly higher nitrate nitrogen (NO3-N) and nitrite nitrogen (NO2-N) levels in the effluent, with similar to 66% of newly-produced oxidised nitrogen as NO2-N. Despite the high nitrification efficiency, only about 23% of the removed NH3-N amount from the influent was ultimately transformed into oxidised nitrogen due to the simultaneous nitrification-denitrification. Sludge blanket development and granulation occurred simultaneously in the UMSB.