Anaerobic membrane bioreactor (AnMBR) is one of the most advanced water treatment technologies that might contribute to overcome exponential water demand in many regions around the world. AnMBR technology converts wastewater (WW) to reasonable quality of permeate water which can be used for irrigation, produces energy in the form of biogas, and generates stabilized sludge that can be recovered as biofertilizer. In the last decade, AnMBR got high interest to be used for municipal wastewater (MWW) treatment. However, AnMBR still faces some issues that hinder its upscaling to industrial maturity. This review focuses on improving the performance of AnMBR with respect to system configuration and design aspects. Both the fundamental biological (anaerobic digestion) and physical (membrane filtration mechanisms) treatment are discussed. The effect of operational parameters on the performance of AnMBR and exploitation challenges (such as fouling) of AnMBR are addressed as well. Overall, new research directions aiming at improving AnMBR performance (strategies to ensure stability under different organic loads and operating conditions, maximum recovery of dissolved methane, combination of different cleaning techniques, validation of the economic feasibility on a large scale) is still needed.