A decentralized full-scale sequencing batch reactor (SBR) system for treating wastewater was operated to assess their feasibility and the response of bacterial population dynamic and nutrient removal performance. The reactor was operated under low dissolved oxygen (DO) concentration (0.3–0.7 mgL−1) and an average applied organic load of 0.5 g COD L−1 d−1 (COD: chemical oxygen demand). Removal efficiencies were higher than 70% for both soluble chemical oxygen demand and ammonium, with average effluent concentration of 51 ± 15 mg COD L−1 and 16.0 mg NH4+ L−1. The mixed liquor volatile suspended solids/total suspended solids ratio was 0.9, and the average food/microorganism ratio was 0.3 g COD g VSS−1 d−1 (VSS: volatile suspended solids). The active biomass was composed of 94.9% heterotrophic and 5.1% autotrophic organisms. The most frequently identified were chemoorganoheterotrophic organisms affiliated with Bacteroidetes and Firmicutes, some of them with the capacity to denitrify and grow under low DO concentration. Temperature and sludge withdrawal were important factors in determining nitrification and phosphorus removal rates. The SBR was viable for domestic wastewater treatment and showed that the microbial community greatly influenced its performance. This work can also provide valuable insights into further applications in systems operated under low DO condition.