The accumulation of intermediate products, particularly volatile fatty acids (VFAs) like propionic acid (HPr) or its dissociated form, can inhibit biogas production during anaerobic digestion (AD) at low concentrations. Knowledge about the response of microorganisms to VFA inhibition can help control the digesters. In this study, we aimed to determine how sodium propionate (NaPr) inhibits the AD of municipal sewage sludge by identifying shifts in the microbial community. Four 5 L reactors were operated in semi-continuous mode using sewage sludge and then loaded with different levels of NaPr. The reactors operated at 37 °C with two hydraulic retention times. The results show that there was no apparent inhibition of biogas production at NaPr loading up to 20.3 mmol·L−1. However, moderate inhibition was observed at 81 mmol·L−1, corresponding to an approximate 10% decrease in methane production, while a ≈40% decrease in methane production was observed at 135.3 mmol·L−1. Sequencing analysis revealed that the community composition was dominated by Bacillota, Bacteroidota, Proteobacteria, Chloroflexi, and Cloacimonadota, with Halobacterota and Euryarchaeota as the main archaeal groups. PERMANOVA revealed incubation time as the primary driver of community structure, followed by NaPr concentration. Elevated NaPr levels resulted in a decline in Methanothrix and Methanobrevibacter and promoted distinct syntrophic propionate-oxidizing bacteria (SPOB).