The aerated lagoon treatment system of a New Zealand pulp and paper mill exhibited 65% removal of adsorbable organic halide (AOX). This value is high compared to published data and an assessment was made of possible mechanisms for the observed AOX removal. Much of this removal took place in a short section (3.3 hour residence time) of the system's main lagoon. The initial AOX decrease in the aqueous phase could be achieved in part by settling of AOX-containing suspended solids from the influent wastewaters and by alkaline dehalogenation. In addition, lime and bacterial solids present in the treatment system were able to adsorb AOX from the influent wastewaters. Only a small proportion of the organic chlorine removed was found in sludges. A mass balance of aqueous and solid phases indicated that over 99% of the removed AOX was mineralised.