PVA-gel beads were used as a biocarrier for treatment of corn steep liquor wastewater containing high levels of volatile fatty acids (VFA), where retention of biomass could be either solely in the porous microstructure of the gel or by granule formation using a gel bead as a nucleus. With stable COD removal efficiencies of 90% or greater, continuous treatment was demonstrated over a four month period, with organic loading rates being increased stepwise from 2.5 to 22.5 kg COD/m3 d. In addition, VFA in the effluent were, with few exceptions maintained close to zero. Gas production increased over the course of the study and reached a level of 0.38 m3/kg COD consisting of 65% methane with the remainder being mostly carbon dioxide. Biomass granules containing methane producing bacteria progressively formed around the PVA-gel beads during the study. In contrast, very few small natural granules developed apart from PVA-gel nuclei indicating that PVA gel may serve well as a seeding material to enhance granulation when natural occurrence is lacking.