Wastewater Treatment Plants (WWTPs) are a key pathway by which nanoparticles (NPs) enter the environment following release from NP-enabled products. This work considers the fate and exposure of CeO2 NPs in WWTPs in a two-step process of heteroaggregation with bacteria followed by the subsequent reduction of Ce(IV) to Ce(III). Measurements of NP association with solids in sludge were combined with experimental estimates of reduction rate constants for CeO2 NPs in Monte Carlo simulations to predict the concentrations and speciation of Ce in WWTP effluents and biosolids. Experiments indicated preferential accumulation of CeO2 NPs in biosolids where reductive transformation would occur. Surface functionalization was observed to impact both the distribution coefficient and the rates of transformation. The relative affinity of CeO2 NPs for bacterial suspensions in sludge appears to explain differences in the observed rates of Ce reduction for the two types of CeO2 NPs studied.