A system for treating wastewater capable of removing granules from treated wastewater comprises a source of activated sludge for promoting anaerobic and aerobic digestion of wastewater; a compressor for supplying a volume of pressurized air for promoting aerobic digestion of wastewater; at least one anaerobic reactor for anaerobically treating wastewater with the activated sludge and at least one aerobic reactor for aerobically treating wastewater with the activated sludge and pressurized air, thereby producing additional activated sludge material containing granules; a pump for circulating wastewater through the system; a pressure control system for regulating pressure in the system; a discharge system for removing treated wastewater and activated sludge from an anaerobic and an aerobic reactor; and a filter for removing the granules from the additional activated sludge.