Optimization of up-flow anaerobic sludge blanket (UASB) reactor operation for treatment of a composite fermentation and distillation wastewater was achieved using a locally available thickened municipal sludge instead of imported commercial anaerobic granulated sludge. Over the first 12 days, a fed batch start-up operation was maintained and anaerobic stable sludge granules with 11.2% of extra cellular polymers (ECP) were successfully developed and further used for long-term continuous operation. Two types of granules were developed within the reactor but with very different characteristics. Granules grown in the bottom part of UASB reactor were more compact and tense than those that occurred in the upper part. The latter were fragile, irregular in shape and with much lower methanogenic activities. Bottom granules were dominated by both Methanosarcina spp. and Methanosaeta spp. whereas upper granules harbored only Methanosarcina spp. During continuous anaerobic treatment of composite fermentation and distillation wastewater with organic load of 24 g.l-1 of chemical oxygen demand (COD), a removal efficiency of up to 84% was achieved. Moreover, biogas was produced with a production rate of o.52 m3/Kg COD removed.Keywords: Composite wastewater, up-flow anaerobic sludge blanket (UASB), anaerobic biological treatment, biogas, granulated anaerobic sludge, industrial wastewater.African Journal of Biotechnology, Vol. 13(10), pp. 1136-1142, 5 March, 201