Malaysia generates about 1 million metric tonnes of paper mill sludge (PMS) annually as bio-solid waste. Current practice for disposal are mainly landfill, may not be viable in the long run as land cost is becoming more expensive. Recycling in mill for enegy generation is far beyond the reach of small capacity mills. A cost effective and enviromentally safe procedure for reutilization of these waste was developed. Organic soil is produces through biological, chemical and physical degradation processes of PMS prior mixed with organic fibres and naturally occuring microbes. The end product can be used as potting media, organic fertilizer or amelioration of infertile and poor drained soils.