The discharge of textile wastewater containing dye in the environment is varying for both toxicology and esthetical reasons as dyes impede light penetration, damage the quality of the receiving streams. Upflow anaerobic sludge blanket reactor with anaerobic digester sludge treating starch wastewater has been used to investigate the removal efficiency of chemical oxygen demand (COD) and colour of textile dye wastewater. In this study, the starch and textile dye wastewater was mixed at 70 and 30%, respectively, and the experiments were carried out with recycle of treated wastewater at different percentage as 10, 20, 30 and 40. Maximum removal of COD and colour was 96% and 93.3%, respectively, at 30% recycle. At various OLR and HRT, the maximum removal of COD, colour was 95.9%, 93% at 6.81 kg COD/m3d and 96%, 93% with 24 h of HRT. The maximum production of biogas at 24 h of HRT with 30% recycle was about 355 l/d. The Volatile fatty acid/Alkalinity ratio of methanogenic reactor was found to be 0.049–0.053. The result provided evidence, the starch and dye wastewater have wide variation in their characteristics was treated on combination, this new technology supports the effective utilization of starch waste in destruction of dye.