In this study, we demonstrated that anaerobic granular sludge could be successfully transformed into aerobic granular sludge in a continuous up-flow reactor in 45 days. An aerobic microbial community successfully developed in the granules and high organic matter and nitrogen removal performance was achieved. Under an ammonia nitrogen loading rate of 0.8 kg N/(m day), ammonia nitrogen and the total nitrogen removal efficiency of the reactor reached up to 100 and 93%, respectively. An obvious bacterial community shift in granular sludge was observed during the transformation process. By comparing with the bacterial community in aerobic granules cultivated from floccular activated sludge, some bacteria (affiliated with Comamonadaceae, Xanthomonadaceae, Rhodocyclaceae, Moraxellaceae, and Nitrosomonadaceae) playing significant roles in maintaining the structures and functions of aerobic granules were identified. After the transformation, the granules could be clearly separated into the inner core and outer shell. 16S rRNA gene sequencing results indicated many bacterial species present in both the inner core and outer shell; however, their abundance differed significantly. Overall, this study confirms the feasibility of transforming anaerobic granules into aerobic granules and provides novel approaches and insights to understand the microbial ecology in granular sludge.