A pilot-scale on-site system combining biological treatment and a drying stage was applied to achieve mass reduction of food waste (FW) at an urban residential complex. The effectiveness of biodegrading the organic portion of FW via microorganisms existing in FW improved by 38.80% by controlling rates of FW loading and air-flow. In one stage of the on-site biological treatment, the major bacterial community was identified to be mesophilic and facultative; Lactobacillus was the most dominant genus, accounting for 78.1% of bacterial community. Total mass reduction of FW approached 90.15% by increasing removal of both moisture and the organic portion of FW. In addition, the solids and liquids of the final by-products have the potential to be recycled into resources such as fertilizer, a bio-solid refuse fuel or external carbon sources for wastewater treatment plants. The proposed decentralized system offers practical and environmental approaches for FW management in residential complexes.