This paper describes the performance of a granular bed baffled reactor when receiving unpredictable hydraulic shock loads, which is a frequent occurrence in industrial wastewater treatment plants. Shock loads were created by rapidly increasing volumetric organic loading rates from 2.5 to 20 kg COD m(-3) d(-1), by decreasing (in a stepwise fashion) hydraulic retention time from 48 hrs to 6 hrs. Synthetic wastewater containing glucose as the main organic compound was used in this study. High effluent quality was observed, with soluble COD removal efficiencies of 94% to 97%, during all shock loading conditions at steady state. The reactor appeared to possess high tolerance to rapid hydraulic changes with fast recovery time. Marked phase separation between different microorganisms occurred at high organic loading rate, with acidogenesis and methanogenesis being the respective dominant activities in the upstream and downstream compartments of the reactor. The compartmentalised nature of the reactor and the granular bed structure were believed to be responsible for high reactor stability during overloading conditions. Microbial ecology in the system appeared to favour acetate and butyrate production at high organic loading rate. Granular biomass possessed good settling characteristics, hence encouraging high biomass retention within the system. The dense granular bed in the methanogenic zone acted as a filtration bed for lighter floating non-granular biomass, thus further reducing overall effluent solids concentration. This study demonstrated that the granular bed baffled reactor is a suitable system for treating industrial wastewaters with highly varying rates.