A two-stage continuous process was developed for treating medium-strength wastewater combining microbial fuel cell (MFC) using activated carbon (AC)/TiO2 composite as cathode catalyst and submerged membrane bioreactor (MBR). Synthetic wastewater, having total chemical oxygen demand (COD) of around 3 g/L, was introduced first in the anodic chamber of MFC in a continuous mode of operation followed by aerobic MBR. Submerged hollow-fibre ultra-filtration membrane assembly was attached to draw permeate from MBR. The electrical performance of MFC was evaluated by polarisation, which showed a maximum volumetric power density of 1.02 W/m3 with much lower whole-cell internal resistance of 10 Ω. The coulombic efficiency of MFC was estimated to be 0.31%, demonstrating AC/TiO2 composite as a promising cathode catalyst for applications in MFC. The permeate of MFC–MBR system showed 98.3 ± 0.3% and 81.9 ± 1.8% of COD and total Kjeldahl nitrogen removal efficiency, respectively, producing permeate with total suspended solids concentration of less than 5 mg/L. Thus, a two-stage reliable process for treatment of wastewater is demonstrated using integrated MFC–MBR for generating high-quality recyclable effluent and facilitating recovery of bio-electricity.