Aerobic granulation is regarded as the future technology for wastewater treatment that can replace conventional activated sludge. In this study, two approaches of forming sulfolane degrading aerobic granules (SDAG) were successfully developed and evaluated. These include adaptation of pre-grown granules to sulfolane environment and coaggregation of pre-grown granules with bacterial culture native to sulfolane contaminated site. The adaption method required a longer period to form robust SDAG compared to coaggregation method where degradation of sulfolane was observed within 24 h. Electronic images revealed dominant filamentous bacteria on the surface of granules while DNA analysis unveiled the complexity of the dynamic change of microbial community during aerobic granule formation. The rate of sulfolane degradation by coaggregated granules reduced as the concentration of carbon source increased, nevertheless, the rate increased with increased biomass. In addition, the presence of co-contaminants can slightly impact the ability of newly cultivated granules to degrade sulfolane. Finally, the stability and settleability of the new aerobic granules was investigated under different environmental conditions. About 30% of the aerobic granules were lost after 14 d of operation without any continuous supply of carbon sources. The surviving SDAGs continued to display an intact structure coupled with good settleability.