The carbon and nitrogen removal potential of an innovative anoxic-aerobic photobioreactor configuration operated with both internal and external recyclings was evaluated under different cyanobacterial-bacterial sludge residence times (9-31 days) during the treatment of wastewaters with low C/N ratios. Under optimal operating conditions, the two-stage photobioreactor was capable of providing organic carbon and nitrogen removals over 95% and 90%, respectively. The continuous biomass recycling from the settler resulted in the enrichment and predominance of rapidly-settling cyanobacterial-bacterial flocs and effluent suspended solid concentrations lower than 35 mg VSS L(-1). These flocs exhibited sedimentation rates of 0.28-0.42 m h(-1) but sludge volumetric indexes of 333-430 ml/g. The decoupling between the hydraulic retention time and sludge retention time mediated by the external recycling also avoided the washout of nitrifying bacteria and supported process operation at biomass concentrations of 1000-1500 mg VSS L(-1). The addition of additional NaHCO3 to the process overcame the CO2 limitation resulting from the intense competition for inorganic carbon between cyanobacteria and nitrifying bacteria in the photobioreactor, which supported the successful implementation of a nitrification-denitrification process. Unexpectedly, this nitrification-denitrification process occurred both simultaneously in the photobioreactor alone (as a result of the negligible dissolved oxygen concentrations) and sequentially in the two-stage anoxic-aerobic configuration with internal NO3(-)/NO2(-) recycling.