During the production of Cephradine (a main constituent of anti-osmotic drug) a large quantity of concentrated effluent was produced. The main polluting compounds in this effluent are osmotic drug, acetic acid and ammonia. The feasibility of using a fluidized bed reactor under anaerobic condition with bioaugmentation to treat anti-osmotic drug based pharmaceutical effluent was evaluated. The main objective of the study was to show that bioaugmentation could be used to promote biological treatment to applications where conventional operation might be difficult or unfavourable. The effluent with chemical oxygen demand (COD) of 14 000-18 000 mg/l was treated in a fluidized bed reactor with a hydraulic retention time of 3-12 h. The reactor was unable to maintain consistent removal in conventional mode of operation due to an inability to retain and grow biomass. The COD reduction (%) after inoculation from a sequencing batch reactor was related to influent concentration, mass of inoculum and hydraulic retention time characterized by calculating the initial food to microorganism ratio. The role of volatile fatty acid (VFA) as co-substrate was assessed with respect to COD reduction (%). Continuous COD reduction (%) attained a maximum value of 88.5% using bioaugmentation through periodic addition of acclimated cells every 2 days with 30-73.2 g of cells from an off-line enricher reactor. © 2001 Elsevier Science Ltd.