Over 60% of the primary and secondary sludge produced in the UK is now processed by mesophilic anaerobic digestion in order to “stabilise” and extract bio-energy from the organic material. However inhibition and destruction of microorganisms is frequently reported and related to elevated ammonia concentrations. Ammonia is released from proteinaceous material in the wastewater and concentrated in the sludge. Empirically observed inhibition or loss of bio-kinetic rate is seldom attributed to specific underlying causes such as loss of enzyme activity or loss of thermodynamic driving force. This work takes a theoretical electrochemical modelling approach to investigate thermodynamic limitations by free energy, enthalpy and entropy analysis. From the Gibb’s free energy results, there is no evidence for thermodynamic limitation arising from even very high concentrations of ammonium ion. However entropy analysis shows a sudden loss of spontaneity when the initial ratio of ammonia to the other solutes, R, exceeds a, concentration dependent, threshold value. The loss of spontaneity is not directly related to the rising pH value which is indicative of the addition of ammonium ions. The loss is however attributable to the depletion of carbonates occurring in anaerobic ammonium oxidation. These results suggest that empirically observed ammoniacal inhibition in anaerobic digestion arises from reduced activity of hydrogenophilic methanogens which are dependent on the simultaneous availability of hydrogen and bi-carbonate ion.