Abstract Background Microbial fuel cells (MFCs) rely on electrochemically active bacteria to capture the chemical energy contained in organics and convert it to electrical energy. Bacteria develop biofilms on the MFC electrodes, allowing considerable conversion capacity and opportunities for extracellular electron transfer (EET). The present knowledge on EET is centred around two Gram-negative models, i.e. Shewanella and Geobacter species, as it is believed that Gram-positives cannot perform EET by themselves as the Gram-negatives can. To understand how bacteria form biofilms within MFCs and how their development, structure and viability affects electron transfer, we performed pure and co-culture experiments. Results Biofilm viability was maintained highest nearer the anode during closed circuit operation (current flowing), in contrast to when the anode was in open circuit (soluble electron acceptor) where viability was highest on top of the biofilm, furthest from the anode. Closed circuit anode Pseudomonas aeruginosa biofilms were considerably thinner compared to the open circuit anode (30 ± 3 μm and 42 ± 3 μm respectively), which is likely due to the higher energetic gain of soluble electron acceptors used. The two Gram-positive bacteria used only provided a fraction of current produced by the Gram-negative organisms. Power output of co-cultures Gram-positive Enterococcus faecium and either Gram-negative organisms, increased by 30-70% relative to the single cultures. Over time the co-culture biofilms segregated, in particular, Pseudomonas aeruginosa creating towers piercing through a thin, uniform layer of Enterococcus faecium. P. aeruginosa and E. faecium together generated a current of 1.8 ± 0.4 mA while alone they produced 0.9 ± 0.01 and 0.2 ± 0.05 mA respectively. Conclusion We postulate that this segregation may be an essential difference in strategy for electron transfer and substrate capture between the Gram-negative and the Gram-positive bacteria used here.