A new wastewater treatment system was developed to reduce sludge production and remove inorganic solids from wastewater. The system also recovers phosphorus and improves nutrient removal. The pilot reactor operated steadily for over 90 days, producing effluent with low levels of ammonia, total nitrogen, phosphorus, and organic matter. The system effectively prevented the buildup of inert solids in the activated sludge, with a good performance in reducing sludge yield.