Recently extensive studies have been carried out to cultivate aerobic granular sludge worldwide, including in China. Aerobic granules, compared with conventional activated sludge flocs, are well known for their regular, dense, and strong microbial structure, good settling ability, high biomass retention, and great ability to withstand shock loadings. Studies have shown that the aerobic granules could be applied for the treatment of low- or high-strength wastewaters, simultaneous removal of organic carbon, nitrogen and phosphorus, and decomposition of toxic wastewaters. Thus, this new form of activate sludge, like anaerobic granular sludge, could be employed for the treatment of municipal and industrial wastewaters in near future. This chapter attempts to provide an up-to-date review on the definition, cultivation, characterization, modeling and application of aerobic granular sludge for biological wastewater treatment. This review outlines some important discoveries with regard to the factors affecting the formation of aerobic granular sludge, their physicochemical characteristics, as well as their microbial structure and diversity. It also summarizes the modeling of aerobic granule formation. Finally, this chapter highlights the applications of aerobic granulation technology in the biological wastewater treatment. It is concluded that the knowledge regarding aerobic granular sludge is far from complete. Although previous studies in this field have undoubtedly improved our understanding on aerobic granular sludge, it is clear that much remains to be learned about the process and that many unanswered questions still remain. One of the challenges appears to be the integration of the existing and growing scientific knowledge base with the observations and applications in practice, which this paper hopes to partially achieve.