Agricultural drainage water in parts of California’s San Joaquin Valley contains selenium (Se) and other substances shown to be harmful to wildfowl living near drainage water evaporation ponds. We have under development a process to remove toxic substances from agricultural drainage water using microalgae and anaerobic bacteria. In the process, algae grown in high rate ponds are used as a source of carbon and energy by anaerobic bacteria to reduce selenate (SeO4=) to selenite (SeO3=) and elemental selenium (Se°) and to reduce nitrate to N2. The bacteria use nitrate, selenate, and selenite as electron acceptors. In the laboratory, soluble selenium was reduced from 200 – 400 mg/l to less than 20 mg/l Se, and nitrate ws reduced from 50 – 150 mg/l to less than 5 mg/l as N. Approximately 17 – 31% of the algal cell biomass was available to denitrifying bacteria. Rapid selenate reduction was inhibited by nitrate, although a slower nitrate-independent mechanism may also exist. Because reduction of SeO4= to Se° passes through the intermediate SeO3=, waste selenium can be removed either as amorphous elemental Se or as SeO3= if Fe(III) is present, since SeO3= adsorbs strongly to ferric hydroxides.