A hybrid ultrafiltration-osmotic membrane bioreactor (UFO-MBR) was investigated for over 35 days for nutrient and trace organic chemical (TOrC) removal from municipal wastewater. The UFO-MBR system uses both ultrafiltration (UF) and forward osmosis (FO) membranes in parallel to simultaneously extract clean water from an activated sludge reactor for nonpotable (or environmental discharge) and potable reuse, respectively. In the FO stream, water is drawn by osmosis from activated sludge through an FO membrane into a draw solution (DS), which becomes diluted during the process. A reverse osmosis (RO) system is then used to reconcentrate the diluted DS and produce clean water suitable for direct potable reuse. The UF membrane extracts water, dissolved salts, and some nutrients from the system to prevent their accumulation in the activated sludge of the osmotic MBR. The UF permeate can be used for nonpotable reuse purposes (e.g., irrigation and toilet flushing). Results from UFO-MBR investigation illustrated that the chemical oxygen demand, total nitrogen, and total phosphorus removals were greater than 99%, 82%, and 99%, respectively. Twenty TOrCs were detected in the municipal wastewater that was used as feed to the UFO-MBR system. Among these 20 TOrCs, 15 were removed by the hybrid UFO-MBR system to below the detection limit. High FO membrane rejection was observed for all ionic and nonionic hydrophilic TOrCs and lower rejection was observed for nonionic hydrophobic TOrCs. With the exceptions of bisphenol A and DEET, all TOrCs that were detected in the DS were well rejected by the RO membrane. Overall, the UFO-MBR can operate sustainably and has the potential to be utilized for direct potable reuse applications.