Although lignin is known to be not readily biodegradable the concentration of dissolved lignin decreased during aerobic biological treatment of paper mill wastewater performed in sequencing batch reactors (SBR). Systematic lab scale batch tests were conducted to clarify whether the observed removal of lignin was the result of biodegradation or adsorption onto the activated sludge. For the batch tests, sludge samples were taken from sequencing batch reactors operated at solid retention times (SRT) of 10, 15, 20, 30, and 40 days, respectively. The amount of lignin present in the bulk liquid and in the sludge samples was quantified by an analytical procedure comprising pyrolysis, gas chromatography and mass spectrometry (py‐GC/MS analysis). It was found that lignin adsorbs onto the activated sludge by up to 30%[TH]w/w. This demonstrates the sludge excellent adsorption properties. The ultimate removal of lignin is achieved by sludge wasting. The highest overall removal rate was found when sludge was used from the SBR run at SRT of 20 days.