This research concentrates on the development of an integrated approach to evaluate the possibility of treating very concentrated (COD = 15-20 g/l) and toxic wastewater (nitro-organic effluent) from the petrochemical industry in UASB reactors. A newly developed method utilising a modified Micro-Oxymax respirometer was used to (1) evaluate the inhibitory effects of varying concentrations of nitro-organic effluent on anaerobic granular sludge and (2) to make the proposal of operational parameters for the start up of the continuous process. Subsequently, the continuous tests were undertaken using laboratory scale upflow anaerobic sludge bed reactors to test gradual adaptation of anaerobic biomass to nitro-organic effluent. Practical application of the experimental results of the laboratory-scale continuous tests was evaluated by running the UASB pilot plant. Acceptable COD removal efficiencies were obtained when nitro-organic effluent was diluted with a readily biodegradable substrate up to 80 vol % of nitro-organic effluent in the inlet. The COD removal was 90% and the methane production rate was 4.5 l/d. Wastewater was detoxified and no acute toxicity of the treated wastewater to the anaerobic biomass was detected. This research indicates that anaerobic digestion of the undiluted nitro-organic effluent was not feasible. However, it is possible to blend the nitro-organic effluent with another effluent stream and co-treat these effluents.