Abstract: A process for drying organic waste, such as sewage sludge, by contacting the organic waste with hot vapors. Partial dewatering of the organic waste is achieved by admixture with a recycled portion of dried solids followed by extrusion of the mixture. The resultant extrudate is then dried, and the unrecycled portion is extruded in a separate operation to form compacted granules having good flow characteristics and suitable for application by commercial fertilizer spreaders. A plasticizer and an extrusion aid may be added to the dried material prior to extrusion.