This study compared the sludge reduction performance of a new oxic-settling-anaerobic (NOSA) process with that of a conventional adsorption–biodegradation process. A 50 m3/d pilot trial system with two different process configurations was operated for 6 months. The NOSA process functioned effectively in removing both chemical oxygen demand and nitrogen with the efficiencies of 86 and 92.5%, respectively, which reduced approximately 40% of the excess sludge. In this research, 0.77 kg volatile suspended solids/d sludge vanished in the anaerobic tank, which accounted for 58.9% of the total sludge loss in the NOSA process. Economic calculation suggests that the new process can dramatically upgrade the sludge reduction in wastewater treatment plants without a digestion device, and the investment for fundamental upgrading can be recovered in 5–6 years by cutting the costs of excess sludge dewatering and disposal treatment.