This study investigated the performance and biomass characteristics of a membrane bioreactor (MBR) and a completely mixed activated sludge (CMAS) system operated at short solids retention times (SRT) ranging from 0.25 to 5 d and hydraulic retention times of 3 and 6 h. The lab-scale reactors were fed with synthetic wastewater to ensure consistency in feed composition. Results show the MBR was capable of achieving excellent quality effluent regardless of the extremely short SRT. The MBR removal efficiencies ranged from approximately 97.3-98.4% (TCOD) in the MBR, compared to 77.5-93.8% (TCOD) and 94.1-97.0% (SCOD) in the CMAS. Nitrification completely ceased when SRT was < 2.5 d. The MBR biomass was composed of small, weak and uniform-sized flocs with large mass of short filamentous organisms and mainly dispersed microorganisms at SRT of 5 and 0.25 d, respectively. In contrast, the CMAS sludge was composed of large flocs with filamentous organisms as a backbone at SRT > 2.5 d. The CMAS flocs were smaller and weaker at shorter SRT. The MBR sludge contained a much higher fraction of non-flocculating microorganisms. This fraction increased significantly with decreasing SRT. It was found that the concentrations of protein and carbohydrates in the exocellular polymeric substances for both the MBR and the CMAS decreased with increasing F/M ratio or decreasing SRT. The combination of increasing amounts of non-flocculating microorganisms and a reduction of EPS at shorter SRT in both reactors contributed to deteriorating sludge settling properties. A significant presence of dispersed biomass and small flocs in MBR contributed to better reactor performance probably due to less mass transfer resistance.