Combined anaerobic-aerobic bioreactors offer considerable potential for treating different industrial wastewaters. However, difficulty in maintaining a stable coexistence of anaerobic, anoxic, and aerobic microbial communities and the necessity of space-consuming external settlers remain as crucial drawbacks associated with these systems. In this study, an innovative single stage combined airlift bioreactor (CALBR) comprising multiple bioreactors (anaerobic/anoxic/aerobic) and an internal settler (a rotating spiral separator for in-situ separation of biomass) was exploited to achieve simultaneous carbon and nitrogen removal from milk processing wastewater (MPW). Results demonstrated that the anaerobic pre-treatment zone made a substantial contribution towards COD and TN removal. Successful biomass separation and high effluent quality revealed that the rotating spiral separator can be used as a coupled clarifier to sustain higher biomass concentration through boosting the sludge compressibility and settleability which further upgrades the overall treatment bioprocess. sCOD removal, TN removal, SVI, and effluent turbidity of ˃96%, ˃75%, ˂90 mL/g, and ˂10 NTU were reached, respectively under optimum condition. The outcomes suggested that the novel CALBR is a promising technology which has a great potential to be transferred into practical implementation for high-rate combined biological wastewater treatment and sludge separation.