The impact of adding a modified Ludzack−Ettinger (MLE) configuration with Nitrate Recycle (NRCY) on continuous-flow aerobic granulation has yet to be explored. The potential negative effects of MLE on sludge densification include that: (1) bioflocs brought by NRCY could compete with granules in feast zones; and (2) carbon addition to anoxic zones could increase the system organic loading rates and lead to higher feast-to-famine ratios. Two pilot-scale plug flow reactor (PFR) systems fed with real domestic wastewater were set up onsite to test these hypotheses. The results showed that MLE configuration with NRCY could hinder the sludge granulation, but the hindrance could be alleviated by the NRCY location change which to some extent also compensates for the negative effect of higher feast-to-famine ratios due to carbon addition in MLE. This NRCY location change can be advantageous to drive sludge densification without a radical washout of the sludge inventory, and had no effects on the chemical oxygen demand (COD) and nitrogen removal efficiencies. The PFR pilot design for the MLE process with a modified NRCY location tested in this study could be developed as an alternative to hydrocyclones for full-scale, greenfield, continuous sludge densification applications.