Effects of hydraulic retention time (HRT) and gas volume on efficiency of wastewater treatment are discussed based on a simulation experiment in which the domestic swage was treated by the two-stage-bio-contact oxidation process. The result shows that the average CODcr, BOD5, suspended solid (SS), and ammonia-nitrogen removal rate are 94.5 %, 93.2 %, 91.7 % and 46.9 %, respectively, under the conditions of a total air/water ratio of 5: 1 , an air/water ratio of 3:1 for oxidation tank 1 and 2:1for oxidation tank 2 and a hydraulic retention time of 1 h for each stage. This method is suitable for domestic sewage treatment of residential community and small towns as well.