The removal of trace organic compounds (TrOCs) by a novel membrane distillation–thermophilic bioreactor (MDBR) system was examined. Salinity build-up and the thermophilic conditions to some extent adversely impacted the performance of the bioreactor, particularly the removal of total nitrogen and recalcitrant TrOCs. While most TrOCs were well removed by the thermophilic bioreactor, compounds containing electron withdrawing functional groups in their molecular structure were recalcitrant to biological treatment and their removal efficiency by the thermophilic bioreactor was low (0–53%). However, the overall performance of the novel MDBR system with respect to the removal of total organic carbon, total nitrogen, and TrOCs was high and was not significantly affected by the conditions of the bioreactor. All TrOCs investigated here were highly removed (>95%) by the MDBR system. Biodegradation, sludge adsorption, and rejection by MD contribute to the removal of TrOCs by MDBR treatment.