The upflow anaerobic sludge blanket reactor is an effective high-rate process for wastewater treatment. However, for optimal performance, the biomass must be in a granular form. This paper discusses the ecological and chemical composition of sludges from several different reactors in relation to granule formation. The results indicate that biopolymers, calcium, phosphorus and the filamentous methanogen, Methanothrix, may play a significant role in the interactions which result in the formation of granules.