In order to investigate the aerobic granules cultured under alternating aerobic and anoxic conditions, a sequencing batch reactor (SBR) was operated without the presence of a carrier material. Nitrification and denitrification occurred alternately in the SBR operation, with an increased nitrification efficiency of up to 97% and a high chemical oxygen demand (COD) removal efficiency of up to 95%. It was observed that physical characteristics of granule play an important role in the performance of the SBR process. Light microscopy was used to observe the time dependent development of the granules in the SBR. Based on the microscopic observations, some floc-like sludges remained in the form of a mixture with granules for 30 days of operation. Even though various granule sizes had been formed in the reactor after 50 days, the granule sizes were primarily from 1±0.35 to 1.3±0.45 mm, rarely exceeding 2 mm. The granules were analyzed by a combination of microelectrodes and fluorescent in situ hybridization (FISH), which provides more detailed information on what happens inside the granules. Based on their results, ammonia oxidizing bacteria (AOB) existed primarily in the upper and middle layers of the granule. Assuming a first-order reaction for nitrification, most of the nitrification is likely to occur from the surface to 300 μm into the granular thickness.