The cotton-textile industry consumes significant amounts of water during manufacturing, creating high volumes of wastewater needing treatment. The organic-load concentration of cotton-textile wastewater is equivalent to a medium-strength municipal wastewater; the color of the water, however, remains a significant environmental issue. This research, in cooperation with a cotton-textile manufacturer, investigated different treatment methods and different combinations of methods to identify the most cost-effective approaches to treating textile wastewater. Although activated-sludge is economical, it can only be used as part of an integrated wastewater management system because it cannot decolorize wastewater. Coagulation/flocculation methods are able to decolorize cotton-wastewater; however, this process creates high amounts of wastewater solids, thus significantly increasing total treatment costs. Chemical oxidation is an environmentally friendly technique that can only be used as a polishing step because of high operating costs. Anaerobic digestion in a series of fixed-bed bioreactors with immobilized methanogens using acetic acid as a substrate and a pH-control agent followed by activated-sludge treatment was found to be the most cost-effective and environmentally safe cotton-textile wastewater management approach investigated.