•CO2-effect on microalgal-bacterial granular sludge (MBGS) process was evaluated.•CO2 could maintain the compact structure and the stable performance of MBGS.•CO2 could enhance the organics and phosphorus removal of MBGS process.•CO2 could promote the growth of algae and phosphorus accumulating organisms.•CO2 supply for MBGS process could achieve a carbon-negative objective. As a promising wastewater treatment technology, little is known about whether the greenhouse gas CO2 can be applied for microalgal-bacterial granular sludge (MBGS) process. This article applied CO2 for improving MBGS process. It was found that the physical structure of MBGS with no CO2 addition appeared to have a trend to be loose and disintegrated, with a sludge volume index at 5 min (SVI5) of over 150 mL/g and an average pore size of 35 nm in 60 d operation. However, CO2 could maintain the compact and integrated structure of MBGS with a SVI5 lower than 50 mL/g and an average pore size ranging from 10 to 13 nm. CO2 could enhance the production of extracellular polysaccharides and aromatic protein, thus favoring the granular stability of MBGS. CO2 could change the aqueous environment, e.g. lowering the pH values, which resulted in different microbial communities as well as metabolic potentials of MBGS. As for the reactor performance, CO2 could significantly improve the removals of organics and phosphorus, evidenced by the enhancement of genes encoding acetate-CoA ligase and ATPase, respectively. Although the mass ratio of algae to bacteria was elevated by CO2 addition, the ammonia removal related enzymes of glutamate dehydrogenase and glutamine synthetase could be negatively and positively impacted by CO2, respectively. Mass balance analysis of carbon indicated that CO2 could provide additional carbon source as well as enhance the buffering capacity for the MBGS system. Further estimations suggested that the MBGS process could achieve a carbon-negative objective for municipal wastewater treatment by supplying CO2 as additional carbon source. Hence, CO2 supply for MBGS process in municipal wastewater treatment can be deemed as a two-birds-one-stone strategy, i.e. maintaining the granular stability and eliminating the carbon emission. This article can advance our basic knowledge on MBGS process towards environment-sustainable wastewater treatment. Display omitted