The upflow anaerobic sludge blanket (UASB) reactor can be effective for treating simple organic compounds containing high concentration of ammonia nitrogen. The chemical oxygen demand (COD) removal efficiency was about 80% at ammonia nitrogen concentration up to 6,000 mg-N/L. This result also showed that it would be possible to treat propionate effectively at free ammonia nitrogen concentration up to 724 mg-N/L if sufficient time was allowed for adaptation. However the specific methanogenic activity (SMA) of granule was lower than that of granule in the reactor with lower ammonia nitrogen concentration. At 8,000 mg-N/L, the inhibition of high ammonia concentration was observed with evidence of increase of the volatile suspended solids (VSS) concentration in the effluent. It might be ascribed to the decrease in the content of extracellular polymer (ECP), which resulted to the sloughing off of obligated proton-reducing acetogens and hetero-genotrophic methanogens from the exterior of granular sludge. This caused a great portion of the finely sludge to be easily washed out. Therefore, failure to maintain the balance between these two groups of microorganism cause accumulation of the hydrogen partial pressure in the reactor, which could have inhibited the growth of acetate utilizing methanogens.