An experimental study of anaerobic treatment was performed by hybrid upflow anaerobic sludge blanket (HUASB) reactor to treat produced water (PW) of an onshore crude oil terminal (COD: 1597 mg/L, NH3-N: 14.7 mg/L, phenol: 13.8 mg/L, BOD5: 862 mg/L, sodium: 6240 mg/L and chloride 9530 mg/L). The produced water with high salinity and other toxic substances will inhibit the methanogens performance if there is no adaptation on biomass before anaerobic digestion. COD removal from produced water was investigated at five different dilutions of produced water and tap water (TW) without any nutrient addition and pre-treatment. The dilution ratios were 1PW:4TW, 2PW:3TW, 3PW:2TW, 4PW:1TW and 5PW:0TW. The reactor was evaluated at mesophilic operating condition (35 ± 2 °C) at 5 days of HRT for 250 days continuous feed. The average COD removals for 1PW:4TW, 2PW:3TW, 3PW:2TW, 4PW:1TW and 5PW:0TW were found to be approximately 76.1%, 73.8%, 70.3%, 46.3% and 61.82% respectively, with final average effluent COD of 123.7 mg/L, 240 mg/L, 294 mg/L, 589 mg/L and 738 mg/L, respectively.