Abstract: Mercury and caustic values are recovered from caustic sludges in a process which comprises intermixing the caustic sludge with a liquid under pressure or agitation to produce a caustic slurry which is separated into a caustic liquor, metallic mercury and a remaining sludge which is suitable for roasting in a retort to recover better than 99 percent of the mercury in the sludge.The process recovers valuable mercury and caustic materials and eliminates pollution of natural resources which was formerly caused when these sludges were disposed of in landfill operations. In addition, the process reduces potential hazards to personnel handling the caustic sludges and requires no addition of chemicals which produce undesirable by-products and add to the cost of the recovery process.