The development of cost-effective methods, which generate minimal chemical wastewater, for methanol production is an important research goal. In this study, treated wastewater (TWW) was utilized as a culture solution for methanol production by mixed methanotroph species as an alternative to media prepared from commercial or chemical agents, e.g., nitrate mineral salts medium. Furthermore, a realistic alternative for producing methanol in wastewater treatment plants using biogas from anaerobic digestion was proposed. By culturing mixed methanotroph species with nitrate and phosphate-supplemented TWW in municipal wastewater treatment plants, this study demonstrates, for the first time, the application of biogas generated from the sludge digester of municipal wastewater treatment plants. NaCl alone inhibited methanol dehydrogenase and the addition of 40 mM formate as an electron donor increased methanol production to 6.35 mM. These results confirmed that this practical energy production method could enable cost-effective methanol production. As such, methanol produced in wastewater treatment plants can be used as an eco-friendly energy and carbon source for biological denitrification, which can be an alternative to reducing the expenses required for the waste water treatment process.