Nitrogen removal from hypersaline wastewater was successfully started up by inoculating estuarine sediments for 140 days. Efficient ammonia and total nitrogen removal was sustained under specific ammonia loading of 0.016–0.139 kg N/[kg VSS day] in a sequencing batch reactor. Stable nitrite accumulation was observed during nitrification. The specific ammonia consumption rate was higher than the value of freshwater activated sludge and salt-acclimated freshwater activated sludge. With methanol as carbon source, specific nitrite reduction rate of halophilic denitrifiers was much less than the freshwater counterpart. Halophilic activated sludge was characterized as good settling and flocculation prosperity with small floc size and net-like sludge structure. The abundance of ammonia-oxidizing bacteria outnumbered ammonia-oxidizing archaeas in both estuarine sediments and the activated sludge. Nitrifier population was dominated by the halophilic members of genus Nitrosomonas. This study demonstrated the application of mixed halophilic consortia for efficient nitrogen removal, overcoming the limits and difficulties of applying freshwater bacteria for saline wastewater treatment.