The present invention provides a system that has been devised to overcome the two most important limitations for sustained biological hydrogen production, namely contamination of the microbial hydrogen-producing cultures with methane-producing cultures necessitating frequent re-start-up and/or other methanogenic bacteria inactivation techniques, and the low bacterial yield of hydrogen-producers culminating in microbial washout from the system and failure. The system includes a continuously stirred bioreactor (CSTR) for biological hydrogen production, followed by a gravity settler positioned downstream of the CSTR, which combination forms a biohydrogenator. The biomass concentration in the hydrogen reactor is kept at the desired range through biomass recirculation from the bottom of the gravity settler and/or biomass wastage from the gravity settler's underflow. The gravity setter effluent is loaded with volatile fatty acids, as a result of microbiological breakdown of the influent waste constituents by hydrogen-producing bacteria, and is an excellent substrate for methane-forming bacteria in the downstream biomethanator.