We have simulated a nitrifying biofilm with one ammonia and one nitrite oxidising species in order to elucidate the effect of various extracellular polymeric substance (EPS) production scenarios on biofilm structure and function. The individual-based model (IbM) BacSim simulates diffusion of all substrates on a two-dimensional lattice. Each bacterium is individually simulated as a sphere of given size in a continuous, three-dimensional space. EPS production kinetics was described by a growth rate dependent and an independent term (Leudeking-Piret equation). The structure of the biofilm was dramatically influenced by EPS production or capsule formation. EPS production decreased growth of producers and stimulated growth of non-producers because of the energy cost involved. For the same reason, EPS accumulation can fall as its rate of production increases. The patchiness and roughness of the biofilm decreased and the porosity increased due to EPS production. EPS density was maximal in the middle of the vertical profile. Introduction of binding forces between like cells increased clustering.