Post-treatment of anaerobic wastewater was undertaken to biologically oxidize dissolved methane, with the aim of preventing methane emission. The performance of dissolved methane oxidation and competition for oxygen among methane, ammonium, organic matter, and sulfide oxidizing bacteria were investigated using a lab-scale closed-type down-flow hanging sponge (DHS) reactor. Under the oxygen abundant condition of a hydraulic retention time of 2h and volumetric air supply rate of 12.95m(3)-airm(-3)day(-1), greater than 90% oxidation of dissolved methane, ammonium, sulfide, and organic matter was achieved. With reduction in the air supply rate, ammonium oxidation first ceased, after which methane oxidation deteriorated. Sulfide oxidation was disrupted in the final step, indicating that COD and sulfide oxidation occurred prior to methane oxidation. A microbial community analysis revealed that peculiar methanotrophic communities dominating the Methylocaldum species were formed in the DHS reactor operation.