A hybrid upflow anaerobic sludge blanket (UASB)–moving bed biofilm (MBB) and rope bed biofilm (RBB) reactor was designed for treatment of sewage. Possibility of enhancing granulation in an UASB reactor using moving media to improve sludge retention was explored while treating low-strength wastewater. The presence of moving media in the top portion of the UASB reactor allowed a high solid retention time even at very short hydraulic retention times and helped in maintaining selection pressure in the sludge bed to promote formation of different sized sludge granules with an average settling velocity of 67 m/h. These granules were also found to contain plenty of extracellular polymeric substance (EPS) such as 58 mg of polysaccharides (PS) per gram of volatile suspended solids (VSS) and protein (PN) content of 37 mg/g VSS. Enriched sludge of nitrogen-removing bacteria forming a porous biofilm on the media in RBB was also observed in a concentration of around 894 g/m2. The nitrogen removing sludge also had a high EPS content of around 22 mg PS/g VSS and 28 mg PN/g VSS. This hybrid UASB-MBB-RBB reactor with enhanced anaerobic granular sludge treating both carbonaceous and nitrogenous matter may be a sustainable solution for decentralized sewage treatment. © 2017 Informa UK Limited, trading as Taylor & Francis Group.