A 5.1 L laboratory scale upflow anaerobic sludge bed (UASB) reactor was operated at 55°C over 130 days in order to investigate the feasibility of treating methanol-containing wastewater under thermophilic conditions, focussing on start-up and process stability. Batch assays were conducted to elucidate the most probable pathway for methanol conversion. The results demonstrated a good performance, with a chemical oxygen demand (COD) removal averaging 82% throughout the experiment. No significant VFA accumulation was detected in the effluent, even with bicarbonate concentration exceeding 20 mM. Acetate was the main component of the VFA at relatively low organic loading rates (OLR). At high OLR, the main components were propionate and butyrate. Reactor performance was hardly affected when the system was exposed to non-optimal conditions, i.e., temperature drop, overloading and no feeding. Good thermophilic granular sludge was retained in the reactor. Washout of biomass was not severe during the experiment. From the pathway analysis it could be concluded that indirect pathways play an important role in the methanol degradation by the cultivated consortia.