The activated sludge process within the pulp and paper industry is generally run to minimize the production of waste activated sludge (WAS), leading to high electricity costs from aeration and relatively large basin volumes. In this study, a pilot-scale activated sludge process was run to evaluate the concept of treating the wastewater at high rate with a low sludge age. Two 150 L containers were used, one for aeration and one for sedimentation and sludge return. The hydraulic retention time was decreased from 24 hours to 7 hours, and the sludge age was lowered from 12 days to 2–4 days. The methane potential of the WAS was evaluated using batch tests, as well as continuous anaerobic digestion (AD) in 4 L reactors in mesophilic and thermophilic conditions. Wastewater treatment capacity was increased almost four-fold at maintained degradation efficiency. The lower sludge age greatly improved the methane potential of the WAS in batch tests, reaching 170 NmL CH4/g VS at a sludge age of 2 days. In addition, the continuous AD showed a higher methane production at thermophilic conditions. Thus, the combination of high-rate wastewater treatment and AD of WAS is a promising option for the pulp and paper industry.