The hybrid up flow anaerobic sludge blanket reactor was evaluated for efficacy in reduction of chemical oxygen demand (COD) and biochemical oxygen demand (BOD) of bulk drug pharmaceutical wastewater under different operational conditions. The start-up of the reactor feed came entirely with glucose, applied at an organic loading rate (OLR) 1 kg COD/m(3) d. Then the reactor was studied at different OLRs ranging from 2 to 11 kg COD/m(3) d with pharmaceutical wastewater. The optimum OLR was found to be 9 kg COD/m3 d, where we found 65-75% COD and 80-94% of BOD reduction with biogas production containing 60-70% of methane and specific methanogenic activity was 320 ml CH(4)/g-VSS d. By the characterization studies of effluent using GC-MS, the hazardous compounds like phenol, 1,2-methoxy phenol, 2.4,6-trichloro phenol, dibutyl phthalate. 1-bromo naphthalene, carbamazepine and antipyrine were present. After the treatment, these compounds degraded almost completely except carbamazepine. Thermophilic methanothrix and methanosaetae like bacteria are present in the granular sludge. (C) 2008 Elsevier Ltd. All rights reserved.