A process and system for treating wastewater is described. The invention degrades sludge produced by treatment of the wastewater to reduce or eliminate the need for sludge dewatering and disposal. The invention also reduces the amount of nutrient additives required to sustain the aerobic wastewater treatment process. In one embodiment the invention includes the steps of (a) providing an aerobic treatment system receiving a supply of the wastewater; (b) treating a supply of the sludge to rupture microbial cells present therein to produce treated sludge having an increased liquid:solid ratio and an increased degradation potential in comparison to untreated sludge; (c) conveying a supply of the treated sludge to the aerobic treatment system; and (d) substantially degrading the supply of treated sludge in the aerobic treatment system. The treated sludge may optionally be subjected to anaerobic digestion prior to delivery to the aerobic treatment system.