A membrane filtration system comprising one or more submerged ultrafiltration or microfiltration membrane assemblies at ambient pressure, with mixed liquor is discharged underneath each membrane assembly. In a sequenced batch reactor system, a coarse bubble air diffuser for scouring each membrane assembly is supplied with air only during the backwash cycle of the filtration system and not during the filtration cycle. In a membrane bioreactor system, the biological treatment section is physically separated from the filtration section and fine bubble air diffusion is used in the biological treatment section.