At present, Pagla Sewage Treatment Plant (STP) is the only sewage treatment plant in Dhaka, the capital city of Bangladesh, with a capacity to treat 120 million litres per day (MLD) of sewage. Evidence suggests that the plant is overburdened and cannot by itself handle the wastewater generated in Dhaka. Furthermore, the treatment plant is hampered by a number of functional problems which limit both its capacity to treat wastewater, and the efficiency of the treatment process. Rectifying the functional problems of the plant and implementing enhancement measures would greatly improve the functionality of Pagla STP. A thorough evaluation was carried out on the performance of the plant and a detailed process flow diagram developed. Several functional problems were identified, mostly pertaining to the primary sedimentation tanks and the unused sludge lagoons. The influent and effluent characteristics of Pagla STP were also assessed using BOD5 values as the primary criteria. It was found that the influent BOD5 value was 832 mg/L and effluent BOD5 was 497.5 mg/L, against design values of 120 mg/L and 50 mg/L respectively. Based on the evaluation, theoretical analysis was done, and a sustainable, cost and energy efficient retrofit was proposed whereby the sludge lagoons would be converted to anaerobic lagoons to facilitate biological pretreatment. It is estimated that implementing such an enhancement would increase the treatment capacity of the plant beyond its original design. Furthermore, theoretical calculations show up to 5,000 m3 of methane gas can be generated daily from the plant, which is enough to power 6,000 homes with renewable energy.