In this study, gelation-facilitated biofilm formation as a new mechanism is proposed for the phenomenon of aerobic granulation in biological wastewater treatment. To obtain an experimental proof for the gelation-based theory, the granulation process was simulated in a chemical system using latex particles for bacterial cells and organic polymers (alginate and peptone) for extracellular polymeric substances (EPS) in a solution with the addition of cations (Ca2+, Mg2+ and Fe3+). The results showed that at a low alginate content (70 mg g−1 mixed liquid suspended solids (MLSS)) flocculation was observed in the suspension with loose flocs. At a higher alginate content (180 mg g−1 MLSS), together with discharge of small flocs, formation of artificial gel granules was successfully achieved leading to granulation. The artificial granules show a morphological property similar to that of actual microbial granules. However, if the protein content increased, granulation became difficult with little gel formation. The experimental work demonstrates the importance of the bonding interactions between EPS functional groups and cations in gel formation and granulation. The laboratory results on the formation of artificial granules provide a sound proof for the theory of gelation-facilitated biofilm formation as the main mechanism for aerobic granulation in sludge suspensions.