Lipid-containing wastewaters, such as those arising from dairy processing, are frequently discharged at temperatures ≤ 20°C. Their valorization at low ambient temperatures offers opportunities to expand the application of high-rate anaerobic wastewater treatment toward achieving energy neutrality by minimizing the energy demand for heating. Lipid hydrolysis generates long-chain fatty acids (LCFAs), which incur operational challenges and hinder stable bioreactor operation by inducing sludge flotation and washout, coupled with the added challenge of treatment at lower temperature (20°C). These challenges are tackled together uniquely during the treatment of LCFA-rich synthetic dairy wastewater (SDW) (33% COD-LCFA) through de novo formed microbial granular sludge within the dynamic sludge chamber–fixed film (DSC-FF) reactor. The novel reactor design facilitated sludge retention for the entire operational period of 150 days by containing settled, flotating, and LCFA-encapsulated granular sludge and biofilm within a single module. High COD removal efficiencies (87–98%) were achieved in the three replicated DSC-FF reactors, along with complete LCFA removal at 18–72 h HRT (LCFA loading rate of 220–890 mgCOD-LCFA/L⋅day) and partial LCFA removal at 12 h HRT (LCFA loading rate of 1333 mgCOD-LCFA/L⋅day). The high removal efficiencies of unsaturated and saturated LCFAs achieved are reported for the first time during continuous anaerobic wastewater treatment at low temperatures (20°C). Moreover, de novo granulation was achieved within 8 days from a combination of inoculum mixtures at a high LCFA concentration (33% COD-LCFA) in SDW. The results demonstrate the feasibility of the DSC-FF reactor for treating LCFA-rich wastewaters at discharge temperatures and offer potential for expanded and more energetically productive anaerobic valorization of lipid-rich wastewater.