In this study, the characteristics of substrate reduction and sludge granulation in anaerobic and aerobic granular sludge reactors (ANGSR and AGSR) were investigated by using synthetic wastewater. As a result, the pH, DO and alkalinity in the AGSR were relatively higher than those in the ANGSR. The efficiency of AGSR on organic and nitrogen reductions was slightly higher than those of the ANGSR. These results indicate that with regard to substrate removal, the ANGSR was suitable for treating high-strength substrate, while the AGSR was appropriate for high influent organic loadings. Granular sludges in both the ANGSR and AGSR investigated by using microscopy observation were a compact and strong in structure, compared with conventional flocculent activated sludge. In particular, the granular sludge in the ANGSR was observed to be affected by ammonia nitrogen under organic/nitrogen ratio of less than 5.