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Whole-cell immobilization of selenate-respiring Sulfurospirillum barnesii in polyacrylamide gels was investigated to allow the treatment of selenate contaminated (790 µg Se × L−1) synthetic wastewater with a high molar excess of nitrate (1,500 times) and sulfate (200 times). Gel-immobilized S. barnesii cells were used to inoculate a mesophilic (30°C) bioreactor fed with lactate as electron donor at an organic loading rate of 5 g chemical oxygen demand (COD) × L−1 day−1. Selenate was reduced efficiently (>97%) in the nitrate and sulfate fed bioreactor, and a minimal effluent concentration of 39 µg Se × L−1 was obtained. Scanning electron microscopy with energy dispersive X-ray (SEM–EDX) analysis revealed spherical bioprecipitates of ≤2 µm diameter mostly on the gel surface, consisting of selenium with a minor contribution of sulfur. To validate the bioaugmentation success under microbial competition, gel cubes with immobilized S. barnesii cells were added to an Upflow Anaerobic Sludge Bed (UASB) reactor, resulting in earlier selenate (24 hydraulic retention times (HRTs)) and sulfate (44 HRTs) removal and higher nitrate/nitrite removal efficiencies compared to a non-bioaugmented control reactor. S. barnesii was efficiently immobilized inside the UASB bioreactors as the selenate-reducing activity was maintained during long-term operation (58 days), and molecular analysis showed that S. barnesii was present in both the sludge bed and the effluent. This demonstrates that gel immobilization of specialized bacterial strains can supersede wash-out and out-competition of newly introduced strains in continuous bioaugmented systems. Eventually, proliferation of a selenium-respiring specialist occurred in the non-bioaugmented control reactor, resulting in simultaneous nitrate and selenate removal during a later phase of operation. Electronic supplementary material The online version of this article (doi:10.1007/s00253-009-1915-x) contains supplementary material, which is available to authorized users.