In this research, the ability of anaerobic and aerobic biological sludges to reduce and stabilize azo dye compounds was studied. Synthetic dye solutions and an industrial textile wastewater were both treated using anaerobic and aerobic biomass, separately and in sequential step-treatment processes. The primary objective was to reduce the wastewater color to an intensity that complies with the Virginia Pollutant Discharge Elimination System (VPDES) permit level. This level is set at 300 American Dye Manufactures Institute (ADMI) units. Further objectives were to achieve reductions in the total kjehdal nitrogen (TKN) and total organic carbon (TOC) in the wastewater. Anaerobic and aerobic treatment systems were both effective in reducing the wastewater color; however, anaerobic treatment generally produced the greatest color removal. Anaerobic/aerobic (ANA/AER) sequential step-treatment provided the best reductions in ADMI color, TKN and TOC. Anaerobic/aerobic/anaerobic/aerobic (ANA/AER/ANA/AER) sequential step-treatment did not yield greater reductions in ADMI color, TKN, or TOC as compared to ANA/AER sequential step-treatment.