A majority of Switzerland’s wastewater treatment plants (WWTPs) use the conventional activated sludge (CAS) biological treatment process in continuous flow. However, these plants are aging and reaching their treatment capacity limits. Sludge densification is studied as a solution to increase their capacity. The sludge is densified by forming granules, which requires a microbial selection pressure and wasting poor-settling biomass. The goal of this study was to determine if hydrocyclones could provide the selective wastage pressure to densify activated sludge. Furthermore, the resulting sludge’s settling properties were evaluated along with the potential for WWTPs to increase their treatment capacity. Hydrocyclones were installed on one of the treatment lines at Gossau WWTP and Laufäcker WWTP (Switzerland). Granulation conditions and sludge settling parameters were monitored in these pilot lines and the parallel reference lines. After nine months of operation at Gossau WWTP, 46% of the activated sludge biomass was granular (> 0.25 mm), compared to only 4% in the reference line. Therefore, densified activated sludge (DAS) was successfully obtained from CAS. Sludge densification was not successful at Laufäcker WWTP, but it is hypothesized that this is due to the pilot line setup and not the lack of selection pressures. Effects of the timing of hydrocyclone operation within intermittent return activated sludge operation were investigated, with no conclusive results. Furthermore, at Gossau WWTP, the settling properties improved in the pilot line, as the diluted sludge volume index (DSVI) reached a steady state of 50 mL/g. According to secondary clarifier design based on the DWA-A131 standard, the mixed liquor suspended solids (MLSS) concentration could thus be increased up to 5 gTSS/L. Gossau’s densified sludge was resistant to the bulking events observed in the reference line. Moreover, batch activity tests revealed that AOB are equally distributed between the floc and granule biomass fractions. NOB are predominantly present in the granules. The system is thus resistant to nitrifier washout as the solids retention time (SRT) of the granules is much higher than the minimum SRT for preventing nitrifier washout. The treatment capacity is therefore improved. Calculations of biological reactor capacity, based on DWA-A131, suggest that with the DAS up to 70% total nitrogen removal could be achieved over the next 25 years, with only minimal retrofitting to install hydrocyclones.