Display omitted •An MBR with internal circulation was used to cultivate granular sludge.•Granular sludge was cultivated directly in this MBR in a continuous-flow mode.•The resulting granular sludge was characterized by multi methods.•Granular sludge remained stable for a long-term operation.•Essential factors to influence the granulation process were illustrated. This research was conducted to cultivate granular sludge directly in a continuous-flow membrane bioreactor and explore the main factors influencing the granulation process. By establishing a suitable internal hydrodynamic circulation in a membrane bioreactor, granular sludge (GS) was successfully cultivated into mature granules with a compact structure and clear shape, in which extracellular polymeric substances played an important role in maintaining its integrity. The results showed that the main factors to determine the cultivation of GS included the total retention of sludge by the membrane module, the internal hydrodynamic circulation, and the entanglement of filamentous bacteria to sludge particles. Filamentous bacteria initiated a granulation process under the action of internal circulation, and maintained the stability of GS for a long period by wrapping biomass aggregates together. Even though filamentous bacteria were the major dominant microbial species in the bioreactor, the microbial community was richly biodiverse, and was responsible for the removal of organic pollutants and nutrients. Overall, the results demonstrated an alternative option for cultivating stable GS directly in a continuous-flow membrane bioreactor.