A system and method for treatment of soot-laden waste water is disclosed. The method comprises the steps of separating the soot from the waste water initially in a clarifier. The concentrated soot is then treated with an activated sludge mixture in a digester with a very long average hydraulic retention time to effectively digest the materials found in the concentrated soot. Soot-free waste water is treated via standard aerobic, and anoxic reactor basins and a clarifier with activated sludge recirculation. The system effectively removes soot from soot-laden waste water in a cost effective manner.