The potential of hydrolysis/fermentation of activated sludge in sludge holding tank (SHT) to produce additional carbon for the biological nutrient removal (BNR) process was investigated. The study was conducted in anaerobic batch tests using the BNR sludge (from a full-scale Westside process) and the mixture of BNR sludge with conventional non-BNR activated sludge (to have higher biodegradable particulate chemical oxygen demand (bpCOD) in sludge). The BioWin 4.1 was used to simulate the anaerobic batch test of the BNR sludge. Also, the overall effect of FCOD production and nutrient release on BNR efficiency of the Westside process was estimated. The experimental results showed that the phosphorous uptake of sludge increased during hydrolysis/ fermentation condition up to the point when poly-P was completely utilized; afterwards, it decreased significantly. The BioWin simulation could not predict the loss of aerobic phosphorous uptake after poly-P was depleted. The results showed that in the case of activated sludge with relatively higher bpCOD (originating from plants with short sludge retention time or without primary sedimentation), beneficial effect of SHT on BNR performance is feasible. In order to increase the potential of SHT to enhance BNR efficiency, a relatively low retention time and high sludge load is recommended.