The wastewater of the largest dairy factory in Israel (Tnuva, Tel-Yosef), discharging approximately 6000 tons BOD per year, is treated in two serial, deep reservoirs (anaerobic/facultative). In this study, which focused on the anaerobic reservoir, we combined in situ measurements (over 18 months) and supporting lab experiments, in order to evaluate its efficiency and to identify the rate-limiting step of the methanogenic fermentation pathway. The anaerobic reservoir could remove above 75% of the BOD and COD all year round, but this was not enough to prevent malodors during the winter. Acetate and propionate, products of lactose fermentation, were the predominant intermediate metabolites in the reservoir and their concentrations were strongly dependent on the temperature and the organic load. The combined effects of colder winter temperatures and seasonal increase of organic load, resulted in a decreased rate of propionate oxidation and a consequent accumulation of soluble BOD and COD. Laboratory batch experiments, conducted during this season, found propionate oxidation to be the rate-limiting step in the process, characterized by a lag period preceding its degradation.