A sulfur cycle-based bioprocess for co-treatment of wet flue gas desulfurization (WFGD) wastes with freshwater sewage has been developed. In this process the removal of organic carbon is mainly associated with biological sulfate or sulfite reduction. Thiosulfate is a major intermediate during biological sulfate/sulfite reduction, and its reduction to sulfide is the rate-limiting step. In this study, the impacts of saline sulfite (the ionized form: HSO3− + SO32−) and free sulfurous acid (FSA, the unionized form: H2SO3) sourced from WGFD wastes on the biological thiosulfate reduction (BTR) activities were thoroughly investigated. The BTR activity and sulfate/sulfite-reducing bacteria (SRB) populations in the thiosulfate-reducing up-flow anaerobic sludge bed (UASB) reactor decreased when the FSA was added to the UASB influent. Batch experiment results confirmed that FSA, instead of saline sulfite, was the true inhibitor of BTR. And BTR activities dropped by 50% as the FSA concentrations were increased from 8.0 × 10−8 to 2.0 × 10−4 mg H2SO3-S/L. From an engineering perspective, the findings of this study provide some hints on how to ensure effective thiosulfate accumulation in biological sulfate/sulfite reduction for the subsequent denitrification/denitritation. Such manipulation would result in higher nitrogen removal rates in this co-treatment process of WFGD wastes with municipal sewage.