Ethanol manufacture from molasses generates large volumes of high strength wastewater, generally called as spentwash, which is serious environmental concern. The effluent is characterized by extremely high chemical oxygen demand (COD) (80,000–100,000 mg/l) and biochemical oxygen demand (BOD) (40,000–50,000 mg/l), apart from low pH, strong odor and dark brown color. During the present study, spentwash was treated in downflow reactor with Polyurethane Foam (PUF) as packing material. The ambient room temperature during the study period was between 27-32o C. Parameters such as pH and biogas were analysed daily, COD was analysed every alternative day and BOD and solids were analysed during steady-state conditions. The optimum HRT was found 8 hours for the reactor. The initial COD concentration fed into the anaerobic reactor was 1 kg COD/m3 .d, further during the study the feed concentration was increased to 2, 3, 4, 5, 6, 7, 8 kg COD/ m3 .d for the reactor. The reactor showed maximum COD removal efficiency of 60% for OLR of 7kg / m3 .d. Maximum biogas production was observed 6.1L/d. The reactor showed maximum solids removal (71% - TS, 74% - DS and 77% - SS) for OLR of 7kg/ m3 .d.