The capacity of activated sludge (AS) microbial populations to form dense granules offers the potential to establish efficiently settleable biomass. This has the potential to circumvent problems around ineffective solids–liquid separation and sensitivity to variable chemical oxygen demand (COD) loads. Although a number of studies have evaluated aerobic laboratory granulation reactors as high-rate treatment systems, the biological processes involved in aerobic granulation are not fully understood. Concomitantly, the impact of operation parameters such as organic loading rates is also important for granulation. The ability of a flocculating AS community to granulate under different selection pressures was evaluated in a laboratory sequencing batch reactor by determining levels of extracellular polymeric substances (EPS) and particle size fractions that developed under feast (4.74 g COD L−1) and famine (0.42 g COD L−1) nutrient regimes. The efficiency of solid–liquid separation was also measured. Aggregation indices showed levels >94% and a sludge volume index factor of up to 0.94, which strongly suggested granule formation; however, microscopy evaluation showed a mixture of flocs and granules. Particle size analysis revealed binomial distribution patterns of particles in the reactor which shifted to smaller tightly bound particles (<200 μm) although large particles (>600 μm) were also measured during famine conditions. This coincided with increases in EPS levels although EPS quantities were low and it is postulated that this could have impacted granule formation: the EPS in the bacterial aggregates were consumed since the AS community was starved.