Anaerobic digestion (AD) operating under organic overload stress usually increases the potential for process instability, leading to significant economic and ecological consequences. Volatile fatty acids (VFAs) accumulation is regularly considered a major factor during AD and their degradation is subject to thermodynamic constraints. To date, no study has systematically investigated the mechanisms of VFA degradation on process stability from the perspective of thermodynamics. Hence, increased substrate-to-inoculum ratio was applied in this study to simulate organic overload stress using batch tests with Hybrid Pennisetum. As a result, VFAs accumulation increased, accompanied by decreased methane yield, slower methane production kinetics and even severe process instability. Metagenomic analysis demonstrated that the accumulated propionate and butyrate were degraded by methyl-malonyl-CoA and the β-oxidation pathway while syntrophic acetate oxidation was preferred during acetate degradation. The deviation of stability parameters to varying degrees from the recommended threshold values was observed. However, a subsequent thermodynamic analysis revealed that moderate organic overload stress merely retarded the syntrophic oxidation of propionate, butyrate, and acetate. As a result, the methanogenic activity decreased, and the lag phase of AD was extended, but no adverse thermodynamic effects actually occurred. Changes in the Gibbs free energy for syntrophic propionate and acetate oxidation have the potential to better identify process stability. This study provided novel insights into the underlying thermodynamic mechanisms of VFA degradation and may have important implications for improving the current diagnostic mode for AD process stability.