This study aims to enhance nutrient removal in an existing activated sludge process based decentralized wastewater treatment system by introducing illumination and algal biofilms in the aeration chamber. The aeration tank (AT) has been modified with the addition of blue light-emitting diode (LED) lights and silicon carbide foam filters as supporting media for algal biofilm growth. The light intensity (varied between 100 and 200 W/180 m3) had shown a strong correlation with the chlorophyll concentration in the mixed liquor. The nitrogen removal has increased from 48 ± 9% to 63 ± 6% and P removal from 37 ± 12% to 70 ± 12% in the modified aeration tank using 200 W LEDs with 12:12 light: dark cycle. Decreasing the light period to 8-h had decreased the carbon and nutrient removal to 32 ± 11% and 45 ± 10% respectively. The influent C/N showed a strong association with carbon and nutrient removal. © 2020 Elsevier Ltd