The primary cause of anaerobic digester failure includes accumulation of inhibitory substances and intermediate products such as volatile fatty acids (VFAs), free ammonia (NH₃ ⁺), and ammonium (NH₄ ⁺). They (except VFAs) are however required as essential nutrients for bacteria growth. The current study specifically investigated the effect of oil content on the biogas production and the stability of anaerobic digestion of food waste. Two lab scale reactors were designed with different organic loading rates and feeding adjustment of used oil addition to testing the effects of lipids on biodegradation and biogas production. The results indicate that, at 2.0 g VS L⁻¹ d⁻¹, the addition of oil (5% v/v), caused the reactor failure, whereas, at 4.0 g VS L⁻¹ d⁻¹, the reactor remained stable for 10 days before the accumulation of VFAs, which resulted in low pH, and thus reduced the biogas and methane production. The addition of NaOH to reactivate the reactors can only improve pH, alkalinity and negatively increased viscosity, but there was no significant effect on biogas production and VFAs concentration. An effective solution to reactivate the reactors was achieved by recirculating 50% of both reactor’s effluent back to the reactors. This resulted in biogas recovery and stable process performance of the reactors. Surprisingly, NH₄ ⁺–N remained stable (1400 mg L⁻¹) throughout the period, far less than the critical concentration of 3000 mg L⁻¹. On the contrary, the low NH₄ ⁺–N couldn’t contribute to buffering the reactor’s high VFA concentration during the unstable period, thereby raising new questions on its roles in anaerobic digestion process.