A packed bed external loop airlift bioreactor (PBELAB) was proposed as an alternative treatment system for wastewater containing ammonia and nitrate compounds. The 60L PBELAB consisted of aeration and non-aeration zones, both of which were packed with plastic bioballs to enhance the surface area for the attachment of bacteria. The system was able to achieve complete removal of all nitrogen compounds with simultaneous nitrification and denitrification, i.e., ammonia was decomposed in the aeration zone and nitrate was biodegraded in the non-aeration zone. At normal operation, the nitrification rate obtained from the system was in the range of 0.14-0.87 gNH3-N/m2d and the denitrification rate was 0.04 gNO3-N/m2d. The factors found to have great influence on the system included dissolved oxygen concentration and biofilm thickness. In addition, PBELAB was proven to perform well under nitrate shock load condition.