To cope up with the rapid industrialization, urbanization and population it is very important to make use of sustainable water treatment technologies to reuse the processed water. Now a days, with technological advancements in anaerobic digestion (AD) process it is possible to recover some of the resources. AD can be coupled with the membrane to provide the complete biomass retention ensuring the growth of slow growing bacteria. Considering these aspects an innovative configuration of Anaerobic Membrane Bioreactor (AnMBR) with limited aeration is developed aiming to improve the reactor performance. This AnMBR is tested, comparing its performance before and after aeration to assess the impact of subjected aeration especially on the activity of methanogens monitoring the biogas production and its composition. Results show that limited aeration helped in achieving significantly lower overall COD removal without adversely affecting the biogas production as well as composition. It also improved the biodegradability of less biodegradable ovalbumin (protein).Furthermore, limited aeration might improve the biotransformation of some of the recalcitrant micropollutants (MPs) possibly by activating mono-oxygenase enzymes of micro-organisms. They might convert the aromatic hydrocarbons into less recalcitrant phenolic intermediates, whose degradation process could occur anaerobically. From the group of available MPs, diclofenac (DCF), metoprolol (MPT), sulphamethoxazole (SMX), trimethorprim (TMP) are selected based on different characteristics. All the selected MPs are analysed for their removal through biodegradation and adsorption under anaerobic conditions. MPs are tested from liquid phase in dissolved form through liquid chromatography coupled with mass spectroscopy (LC-MS) technique while MPs sorbed onto the sludge surface are not analysed because of complex extraction process.Results shows that SMX and TMP are removed more than 99% through AD while DCF is removed with removal efficiency of more than 90%. Adsorption is found to be a major contributor for the removal of DCF, MPT and TMP while SMX is mainly removed through biodegradation. DCF and TMP are adsorbed well (>90%) compared to SMX and MPT (around 30%) onto the sludge contributing to overall removal. Octanol water coefficient (Kow) which defines the hydrophobicity of compound, is the key parameter deciding the extent of adsorption. Additionally, sludge retention time (SRT) and compound structure play major role in deciding the fate of MPs through biodegradation. Different aerations had not shown any significant impact on the removal of DCF, SMX and TMP. While in case of metoprolol effect of aeration was not completely understood. Considering the overall removal, DCF was found to be bio-degraded more with increased concentration. Granular activated carbon (GAC) used for adsorption removed all the four MPs with more than 90% efficiency. Further studies can be conducted on possibilities of adding GAC to the reactor so that they get adsorbed and later on degraded.