The viability of treating high-concentration antibiotic wastewater by an anaerobic membrane bioreactor was studiedusing submerged flat sheet membrane. The objective of the study was to determine the effect of organic loading rate and hydraulic retention time on the removal of cephalosporin derivative, viz. cephalexin, and the intermediates 7-amino-3-deacetoxycephalosporanic acid (7-ADCA) and acyl group (phenyl acetic acid) in an anaerobic membrane bioreactor with enhanced biodegradation using the bioaugmentation technique. The pharmaceutical industry is looking for alternatives to either direct disposal of 7-amino-3-deacetoxycephalosporanic acid and phenyl acetic acid, or further degradation and disposal, which will essentially require additional costs and maintenance. The present regulatory standard, implemented at a global level, does not allow for such disposal alternatives and hence the present study was aimed at the complete removal of the intermediates 7-ADCA and phenyl acetic acid prior to discharge.