BACKGROUND A micro‐oxygen hybrid reactor (MOHR), a two‐zone reactor with suspended sludge zone (SZ) and attached biofilm zone (AZ) at its lower and upper parts respectively, was applied to simultaneously remove sulfur and nitrogen compounds with methane production from concentrated latex wastewater with high concentrations of sulfate (1200 mg L−1) and ammonium (235 mg L−1). Microbial community structures coupled with microbial activities were analyzed and discussed for clarifying relationships of microorganisms in both zones of the MOHR. RESULTS The operating dissolved oxygen in the MOHR was controlled at 0.10–0.15 and 0.05 mg L−1 in the SZ and AZ respectively at various loading rates (LRs) and hydraulic retention times (HRTs). The average optimal overall performances of the MOHR for sulfate (SO42−), total Kjeldahl nitrogen (TKN) and chemical oxygen demand (COD) removal efficiencies were 90.3, 67.8 and 93.0% respectively at HRT 10 days. Elemental sulfur and nitrogen gas were evaluated as major end‐products at 90.2 and 67.9% respectively, with 0.27 L CH4 g−1 CODremoved of methane selectivity. The genera Desulfobulbus and Dongia as well as Thiobacillus denitrificans served as dominant microorganisms in biological sulfate removal. The largest abundance belonged to denitrifying microorganisms with nitrous oxide reductase (nosZ) as target gene. CONCLUSION The MOHR achieved high performance in simultaneous removal of sulfur and nitrogen compounds along with methane production at HRT 10 days. Microorganisms involved in sulfur and nitrogen compound removal processes were more prevalent in the SZ than in the AZ, whereas methanogenic activity was higher in the AZ than in the SZ. © 2019 Society of Chemical Industry