This study evaluated aerobic granulation and nitrogen removal via assimilation, nitrification, and denitrification of a system fed with real domestic wastewater. The granulation process was complete after 160 days of operation. The mature granules had an almost spherical structure, an average size of 473.0 μm, and a good settling ability (SVI30 of 75.6 mL g−1). Ammonium assimilation for cell growth varied between 3.5 and 64.6% during reactor start-up. After granule formation, assimilation accounted for less than 5% and nitrogen was mainly removed by partial nitrification up to nitrite, followed by denitrification via nitrite. Average efficiencies of 86.6% for nitrification, 59.5% for denitrification, and 60.5% for total nitrogen were obtained in this period. The assimilation ability of the mature granules grown on domestic wastewater was lower than the commonly reported results obtained for synthetic granules.