Continuous treatment of Acid Red B (ARB) with activated sludge (AS) bioaugmented by an azo-degrading yeast Candida tropicalis TL-F1 under aerobic conditions was investigated in the form of sequencing batch tests. Dynamics of both bacterial and fungal communities were analyzed using polymerase chain reaction followed by denaturing gradient gel electrophoresis (PCR-DGGE) method. The results showed that bioaugmentation with the yeast TL-F1 improved the performance of AS for continuously decolorizing, degrading and detoxifying ARB. Meanwhile, the AS systems bioaugmented by the yeast TL-F1 showed higher sludge concentration and better AS settleability. The result of PCR-DGGE suggested that microbial communities of both bacteria and fungi shifted due to treatment of ARB and bioaugmentation. Some dominant bacteria and fungi were identified as probably efficient degraders of ARB or its decolorization byproducts. Furthermore, the yeast TL-F1 was found as one of the dominant fungi in all the three bioaugmented systems, suggesting that bioaugmentation was successful due to the colonization of the yeast TL-F1 in AS systems.