Propionate constituting up to 25 % of volatile fatty acids in municipal wastewater, presents metabolic challenges for microorganisms. This study investigated the combined use of propionate along with granular activated carbon (GAC) for aerobic granular sludge (AGS) development and biological nutrient removal (BNR), particularly bio-P removal in granular reactors. GAC addition decreased granulation time and facilitated stable BNR pathways with propionate. AGS demonstrated robust settling properties (≥1 mm, 6 g/L MLSS, 40 mL/g SVI) with increased alginate-like exopolysaccharide (ALE) content up to 400 mgALE/gSS, indicating stable granule formation. Effective ammonium removal via simultaneous nitrification and denitrification was achieved. By day 90, phosphate removals reached 89 %, due to enrichment of polyphosphate accumulating organisms (PAOs) in GAC-containing AGS. The sludge fraction (>0.5 mm) comprised of granules and GAC-biofilms showed efficient phosphate removal through enhanced biological phosphate removal (EBPR). Enrichment of denitrifying PAO, Thauera sp., contributed to enhanced granulation, granular stability and nutrient removals.