The activated sludge process is an old technology, but still the most commonly used one for treatment of wastewater. Despite the wide spread usage the technology still suffers from instability (Tandoi et al. 2006) and high operating cost. Activated sludge processes often carry a large solids inventory. Managing the total inventory without interference is the key component of the optimization process described in this paper. Use of nutrients is common in pulp and paper effluent treatment. Feeding enough nutrients to support the biomass growth is a delicate balance. Overfeeding or underfeeding of nutrients can result in higher costs. Detrimental substances and toxic components in effluents entering a biological treatment system can cause severe, long lasting disturbances (Hynninen & Ingman 1998; Bergeron & Pelletier 2004). A LumiKem test kit is used to measure biological activity with adenosine triphosphate (ATP) in a pulp and paper mill. ATP data are integrated with other standardized mill parameters. Measurements of active volatile suspended solids based on ATP can be used to quantify the living biomass in the activated sludge process and to ensure that sufficient biomass is present in order to degrade the wastewater constituents entering the process. Information about active biomass will assist in optimizing sludge inventories and feeding of nutrients allowing the living biomass to re-populate to create optimal efficiency. ATP measurements can also be used to alert operators if any components toxic to bacteria are present in wastewater. The bio stress index represents the stress level experienced by the microbiological population. This parameter is very useful in monitoring toxicity in and around bioreactors. Results from the wastewater process optimization and ATP measurements showed that treatment cost could be reduced by approximately 20–30% with fewer disturbances and sustained biological activity compared to the reference period. This was mainly achieved by the removal of detrimental substances and optimized nutrient dosage.