In this study, a sequencing batch reactor was set up and operated for over three months to cultivate polyphosphate-accumulating organisms polyphosphate-accumulating organisms (PAOs) in the enriched activated sludge. Batch studies were then carried out to study the effect of different carbon sources on phosphorus removal as well as polyhydroxybutyrate (PHB) production. The carbon sources investigated were acetate, glucose, wastewater, and beef extract. It was found that enhanced biological phosphorus removal could not be achieved using glucose as substrate. This suggested that glucose was not a good candidate for biological phosphorus removal. In terms of PHB production, using acetate and glucose as substrate resulted in PHB production of 42% and 40%, respectively, of the dry cell weight (DCW). Lower PHB production was obtained from using municipal wastewater and beef extract as a carbon source. This resulted in ∼15% and 13% of DCW. It was concluded that municipal wastewater activated sludge can be an economic alternative for PHB production if municipal wastewater is mixed with certain kinds of carbon-enriched industrial wastewater.