Combining the Kubota Tank-Submerged type Ceramic Membrane filtration (TSCM) system with ozonation and powdered activated carbon (PAC) treatment, a new water treatment system, the advanced TSCM system, has been developed. It is a compact, maintenance-free and high performance system for water treatment plants in the small and medium size cities. In this paper, experimental results using 5.5m3/day demonstration plants are shown, and treatment performance is discussed mainly focussing on removal of disinfection by-products. Turbidity, color, total iron, total manganese and ammonia nitrogen were removed to below their detection limits. Accumulation of suspended solids including PAC at a maximum concentration of 8000 mg/L in the membrane tank increases biological degradation activity in the TSCM system. Furthermore, it was confirmed that the advanced TSCM system was able to effectively eliminate disinfection by-products and other organic contaminants in raw water. 75% of T-THMFP removal rate was obtained at only 10 mg-PAC/L dosage without the effect of ozone dosage, while the PAC treatment at 50 mg-PAC/L dosage prior to coagulation results in T-THMFP removals ranging from 40 to 60% (The Adoption Guideline of Advanced Water Treatment Facility, 1988). Therefore, it is concluded that the advanced TSCM system saves on the amount of PAC and is more cost-effective than the other conventional water treatment systems due to efficient utilization of the adsorption capacity of PAC.