Physical, chemical and biological characteristics were investigated for aerobic granules and sludge flocs from three laboratory-scale sequencing batch reactors (SBRs). One reactor was operated as normal SBR (N-SBR) and two reactors were operated as granular SBRs (G-SBR1 and G-SBR2). G-SBR1 was inoculated with activated sludge and G-SBR2 with granules from the municipal wastewater plant in Garching (Germany). The following major parameters and functions were measured and compared between the three reactors: morphology, settling velocity, specific gravity (SG), sludge volume index (SVI), specific oxygen uptake rate (SOUR), distribution of the volume fraction of extracellular polymeric substances (EPS) and bacteria, organic carbon and nitrogen removal. Compared with sludge flocs, granular sludge had excellent settling properties, good solid-liquid separation, high biomass concentration, simultaneous nitrification and denitrification. Aerobic granular sludge does not have a higher microbial activity and there are some problems including higher effluent suspended solids, lower ratio of VSS/SS and no nitrification at the beginning of cultivation. Measurement with CLSM and additional image analysis showed that EPS glycoconjugates build one main fraction inside the granules. The aerobic granules from G-SBR1 prove to be heavier, smaller and have a higher microbial activity compared with G-SBR2. Furthermore, the granules were more compact, with lower SVI and less filamentous bacteria.