Activated sludge used for wastewater treatment globally is composed of a high-density microbial community of great biotechnological significance. In this study the presence and purpose of quorum sensing via N-acylated-l-homoserine lactones (AHLs) in activated sludge was explored. The presence of N-heptanoyl-l-homoserine lactone in organic extracts of sludge was demonstrated along with activation of a LuxR-based AHL monitor strain deployed in sludge, indicating AHL-mediated gene expression is active in sludge flocculates but not in the bulk aqueous phase. Bacterial isolates from activated sludge were screened for AHL production and expression of phenotypes commonly but not exclusively regulated by AHL-mediated gene transcription. N-acylated-l-homoserine lactone and exoenzyme production were frequently observed among the isolates. N-acylated-l-homoserine lactone addition to sludge upregulated chitinase activity and an AHL- and chitinase-producing isolate closely related to Aeromonas hydrophila was shown to respond to AHL addition with upregulation of chitinase activity. N-acylated-l-homoserine lactones produced by this strain were identified and genes ahyI/R and chiA, encoding AHL production and response and chitinase activity respectively, were sequenced. These experiments provide insight into the relationship between AHL-mediated gene expression and exoenzyme activity in activated sludge and may ultimately create opportunities to improve sludge performance.