A novel method is described to automatically estimate several key parameters affecting denitrification in activated sludge processes: the nitrate concentration, the denitrification capacity, and the maximum (substrate unlimited) and actual denitrification rates. From these, the concentration of active denitrifying microorganisms and the quality of available organic substrate pool can be estimated. Additionally, a modification of the method allows the determination of the efficacy of various carbon substrates to enhance denitrification, and this can be used to determine optimal dosing rates of an external carbon source. The method is based on measurements of either fluorescence or redox potential (ORP) in an isolated mini-reactor, the Biological Activity Meter (BAM), situated in the anoxic zone of the wastewater treatment plant. Advantages of the method are that it is in situ, operating at the same temperature as in the measured anoxic zone, requires no pumps or pipes for mixed liquor sampling, consumes little or no reagents, and uses measurement signals which are instantaneous and low maintenance, one of which provides a direct measure of biological activity.