Granular activated carbon (GAC) has been reported to benefit anaerobic digestion systems by stimulating direct interspecies electron transfer (DIET) as an alternative to interspecies hydrogen transfer (IHT). Conventional up-flow anaerobic sludge blanket (UASB) reactors typically have GAC settled at the bottom of the reactor, limiting the contact between biomass and GAC. This study demonstrated a modified UASB reactor that fluidizes GAC by encaging GAC in plastic carriers. Enhanced performance was achieved with respect to methane production and COD removal at an organic loading rate of 1500 g COD/m³/d under the temperature of 20 ^oC using the self-fluidized GAC configuration; with the methanation rate increased from 0.33 ± 0.08 g CH₄-COD/g influent COD in the non-GAC reactor, to 0.66 ± 0.02 g CH₄-COD/g influent COD in the GAC-only reactor, and further increased to 0.77 ± 0.02 g CH₄-COD/g influent COD in the self-fluidized GAC reactor. The concentrations of medium-chain acyl-homoserine lactones increased in the GAC-amended reactors, potentially associated with the promotion of syntrophic interactions between bacteria and archaea. Batch tests were performed for syntrophic propionate degradation under hydrogen-inhibition conditions, and showed that microbial consortium enriched in both GAC amended reactors can overcome hydrogen inhibition. Further microbial community analysis unveiled a variation in spatial distribution in the GAC enriched microbial consortium (including DIET indicator microorganisms such as Geobacter and Methanosarcina) based on the location of GAC in the reactors. This study demonstrated an improved GAC amendment strategy in UASB reactors to facilitate biomethane recovery from wastewater anaerobic digestion.