Abstract Captured biogas produced within wastewater treatment facilities can be the remedy to offset its increasing energy requirements. Furthermore, the conversion of methane to methanol is quite attractive as it is more transportable and has higher energy yield. Methane can be utilized by methanotrophs in which methanol is produced as a metabolic intermediate. Compared to type II, type I methanotrophs are more advantageous due to its higher growth yields and energy efficiency. This work objective is to optimize methanol bio-production using type I methanotrophs enriched from activated sludge process. This study demonstrates methanol production using mixed culture from wastewater sludge. Optimization of methanol dehydrogenase inhibitors, sodium formate, and copper concentrations, as well as, the gaseous headspace composition and biomass density resulted in a significant enhancement in methanol production. The maximum methanol concentration achieved in this study was 485 ± 21 mg/L. Whereas, the highest methanol productivity obtained was equal to 2115 ± 81 mg/L/day. Those findings show the high potential of producing methanol using mixed culture enriched from activated sludge process.