The anaerobic oxidation of methane (AOM) in anaerobic sewage sludge was characterized. The net methane oxidation was observed in samples amended with methane plus sulfate or with methane alone, whereas methane formation was observed in the samples without methane, indicating that methane oxidation and formation occurred simultaneously. The ratio of the net methane oxidation rate to H2S formation was 100:1, suggesting that the AOM was not closely associated with sulfate reduction in the anaerobic sludge. The net AOM was positively associated with the methane concentration and sludge dilution ratio. However, the rate of AOM was negatively correlated with organic substrate (acetate) concentration. Therefore, the production and oxidation of methane could be controlled by environmental conditions and dissolved organic compounds in the bulk solution.