Eutrophication episodes have been recently observed in the Santa Lucia river basin (SLRB) in Uruguay, the main drinking water source for approximately 60% of the Uruguayan population. The local environmental authorities have been strengthening the discharge standards for that particular river basin. There are several industries currently discharging their wastewater directly into the SLRB; some of these industries are required to upgrade their current wastewater treatment systems to comply with the new regulations. This study evaluated the performance of a membrane bioreactor (MBR) on dairy wastewater as a potential treatment technology for fulfilling the new discharge standards. A pilot MBR was placed at the dairy industry wastewater treatment system at two different locations: (i) receiving the wastewater from the industrial process after passing through a grease removal pond (high load stream); and (ii) receiving the wastewater after passing through the grease removal pond and an anaerobic pond (low load stream). The pilot MBR was operated at the following conditions for approximately four months: total sludge retention, hydraulic retention time (HRT) of 25 h, an average influent flow rate of 1.3 m3 day-1, and at two different average chemical oxygen demand (COD) influent concentrations: 1300 mg L-1 (high load stream) and 385 mg L-1 (low load stream). The average reported removal efficiencies on COD, biological oxygen demand (BOD), and ammonium (NH4-N) were 94.1, 98.1, and 99.6%, respectively. In addition, it was observed that for a COD/N ratio above 10, total nitrogen (TN) and total phosphorous (TP) were well removed with average removal efficiencies of 93.1 and 91.0%, respectively. The MBR effluent met the new Uruguayan standards for discharging into the SLRB, and it can be further considered for water reuse at the industrial process. Moreover, a financial feasibility study was carried out for the implementation of a full scale MBR at the existing dairy facility. The results of the feasibility study suggested to accept the investment for the implementation of the MBR technology at the dairy industry. The results of the feasibility analysis considered the high impact of penalties and fines imposed by the local government to the industry when not complying with the effluent discharge standards, as well as the critical situation regarding eutrophication of the SLRB while being the most important source for drinking water in Uruguay.