Disclosed is a system and method for treating domestic and industrial biological waste using diffusers to force circulation and aerate a treatment lagoon. Several lagoons may be used in series to treat raw waste and different variations may be employed to stepwise process the waste. A blend of aerobic and anaerobic microbes is chosen to remove undesired species initially present in the waste or later formed therein, as well as to process the waste itself, depending on the nature of the waste. Aeration with slightly ozonated or oxygenated air facilitates rapid and complete processing of large amounts of waste.