The H2-based membrane biofilm reactor (H2−MBfR) is an emerging technology for removal of nitrate (NO3−) in water supplies. In this research, a lab-scale H2−MBfR equipped with a separated CO2 providing system and a microsensor measuring unit was developed for NO3− removal from synthetic groundwater. Experimental results show that efficient NO3− reduction with a flux of 1.46 g/(m2⋅d) was achieved at the optimal operating conditions of hydraulic retention time (HRT) 80 min, influent NO3− concentration 20 mg N/L, H2 pressure 5 psig and CO2 addition 50 mg/L. Given the complex counter-diffusion of substrates in the H2−MBfR, mathematical modeling is a key tool to both understand its behavior and optimize its performance. A sophisticated model was successfully established, calibrated and validated via comparing the measured and simulated system performance and/or substrate gradients within biofilm. Model results indicate that i) even under the optimal operating conditions, denitrifying bacteria (DNB) in the interior and exterior of biofilm suffered low growth rate, attributed to CO2 and H2 limitation, respectively; ii) appropriate operating parameters are essential to maintaining high activity of DNB in the biofilm; iii) CO2 concentration was the decisive factor which matters its dominant role in mediating hydrogenotrophic denitrification process; iv) the predicted optimum biofilm thickness was 650 µm that can maximize the denitrification flux and prevent loss of H2.