The performance of a membrane bioreactor treating wastewater from a metal transformation industry was compared with the ultrafiltration system at the mill. Toxicity analysis using the microtox and algal tests on the untreated and treated effluents from both systems showed a 130 fold reduction in toxicity due to the ultrafiltration step and a further 10 fold reduction due to the biological step. This resulted in a biomass which must be disposed of as a hazardous waste. In comparison with the present situation, the overall quantity of hazardous waste was reduced by a factor of 3 due to the combination of the bioreactor and the ultrafilters.