Simulated industrial effluent samples of desizing, scouring, dyeing and printing processes were prepared separately at BTRA by adding chemicals such as dye, synthetic size, alkali, colour and pigment with known concentrations. All these samples were allowed to undergo conventional biological treatment and activated sludge process. BTRA fabricated laboratory model activated sludge system consisting of aeration tank and settling clarifier. Using this system, studies were undertaken to determine the efficiency of biological treatment process to reduce pollutional load in effluent samples. Efficiency of biodegradation was measured in terms of COD and BOD reduction. The results of the study indicate that activated sludge process work efficiently only for desizing effluent because this effluent contains starch that is biodegradable matter. Whereas, this system is not so effective on effluents containing refractory organic materials such as PVA, synthetic dye, oil, etc. Micro-organisms (bacteria and fungi), present in activated sludge process, were not able to degrade the complex structure of organic compounds results in sludge bulking.