Reuse of grey water (GW) enables to reduce fresh water consumption, but a treatment is required to prevent potential transmission and propagation of pathogenic organisms. This study presents results on the removal of pathogenic bacteria from GW as well as reduction of turbidity, TSS COD, and BOD by a novel treatment system. Compared to previous studied methods, three new elements are presented in the current treatment of GW: (1) A granulated complex of micelles of the organic cation octadecyltrimethylammonium (ODTMA) with montmorillonite was employed in filtration of GW. This complex was efficient in purifying GW due to its large surface area, positive charge and existence of hydrophobic domains. The granulated complex enabled flow when present exclusively in the filter; (2). A moving bed reactor for decomposition of part of the organic matter in the GW. This pretreatment stage, prior to the micelle-clay filter, was also efficient in removing pathogenic bacteria; (3) A regeneration stage of the micelle-clay filter conducted by passing either dilute solutions of Na-hypochlorite or HCl through the micelle-clay complex, or by heating the complex. Incubation of GW for either two weeks or one day in the pretreatment stage yielded a 10- and 7-fold enhancement in the volume filtered, which did not contain fecal coliforms, i.e., 300 and 210L for 40g of complex, respectively. The capacity of purified volume per gram of the complex increased further several-fold (>23L/g) for filters filled exclusively with granules. Regeneration of the complex in the filter further enhanced the capacity.