Municipal solid waste (MSW) has become a critical problem for city environment. Indiscriminate dumping of waste around cities poses environmental hazards causing ecological imbalances with respect to land, water and pollution. The estimated amount of city waste in Faisalabad (Pakistan) is 1570 tonnes day -1 . This waste along with others produced in the country in the form of cow dung, poultry manure, FYM and filter cake (FC) from sugar industry, can successfully be converted into biofertilizer with the help of EM (effective microorganisms). The EM-Biofertilizer is a potential source of organic matter and soil micro- and macro- nutrients for plant growth as well as for sustainable agriculture. In view of these considerations, the present research work was conducted in the laboratory and greenhouse of the Institute of Soil and Environmental Sciences, University of Agriculture, Faisalabad, during 2003-2006. The objectives of the study were to preserve the nutrients present in the solid waste and convert them into biofertilizer. The raw material of MSW was collected from different point sources of the city, Faisalabad (Pakistan), mixed and divided into bio-degradable and non- biodegradable portions. The biodegradable portion was air dried and ground with the help of grinder. Analysis for NPK, OM and C:N ratio of the waste was conducted. Then it was inoculated with effective microorganisms (EM) solution to convert these wastes into biofertilizer. The waste was taken into plastic pots and inoculated with 1%, 5% and 10% EM solutions for the period of fifteen days. The treatments were repeated thrice. In order to know the effect of EM the waste was again analyzed for NPK, organic matter, organic carbon and C:N ratio and was named as EM-Biofertilizer. The results of the experiment indicated that the inoculation of effective microorganisms had promising effect on the availability of nutrients. The amount of nitrogen (N), phosphorous (P), potassium (K), organic carbon (OC) and organic matter (OM) was improved with respect to control/ compost (without EM). EM application improved the nutritional status of theorganic wastes due to anaerobic decomposition process. The C: N ratio was lower in EM-Biofertilizer than organic matter alone due to free living bacteria in EM inoculum which promoted the availability of nutrients especially the N contents in the manures. The organic matter which was not inoculated with EM resulted to higher degradation process due to aerobic respiration but the EM inoculum inhibited the oxidation way of decomposition, encouraging the process of fermentation. The results revealed that maximum nitrogen was obtained with 5% treatment of effective microorganisms as compared to other inoculation levels after 15 days. Microorganisms enhanced the decomposition process of the organic waste and maintained the availability of essential nutrients to be utilized in soil for sustainable crop production. The EM-Biofertilizer formed in this method was applied to different crops i.e. Cotton (Gossypium hirsutum), Okra (Hibiscus esculentus), Spinach (Spinacia oleracea) and Cowpea (Phaseolus vulgaris), to know the effect of EM-Biofertilizer on the productivity of these crops. The application of EM-Biofertilizer had significant effect on the growth and nutrient concentrations in plants and soil. There was positive correlation between NPK concentrations in leaves of the crops. In case of cotton, on relative basis there was 23% increase in cotton boll size in the EM-Biofertilizer treatment as compared with soil alone and 7% increase as compared to compost i.e. without EM treatment. The same trend was noted in case of okra, spinach and cowpea where with the application of EM-Biofertilizer, the increase in fruit length, leaf length and pod size was 53%, 46% and 60%, respectively as compared to control (soil only) where as 22%, 41% and 46% respective increase was noted as compared to compost (without EM-Biofertilizer). There was significant effect of EM- Biofertilizer on plant height, and number of bolls of cotton, the increase was 50% and 53% respectively with respect to compost alone. Same positive effect of EM- Biofertilizer was also noted in the increase of number of plants (33%), number of fruits (39%), fruit length (22%) and biomass (15%) as compared to control (without EM-Biofertilizer) in case of okra. There was significant effect in theincrease of leaf length (41.24%) and biomass (5%) in case of spinach with the application of EM-Biofertilizer. This was because of the availability of plant nutrients, especially the N and P which are the main growth limiting nutrients. The increase in number of grains (67%), grain weight (50%) and pod size (46%) was also recorded in case of cowpea, on the EM-Biofertilizer treatments as compared to compost (without EM). The percentage increase in nitrogen, phosphorus, potassium and organic matter in soil (for cotton) i.e. 29%, 14%, 18% and 78% respectively, was observed with the treatment of EM-Biofertilizer. Same trend in increase of soil NPK and OM was noted in 5% EM-Biofertilizer treatment in the case of spinach, okra and cowpea. The correlations were developed, which indicated that N, P, K in leaves and OM in soil have positive correlation with the yield of all these crops. The above results clearly depicted that the soil quality parameters i.e. NPK and OM can be sustained through the use of EM technology. Tonnes of solid waste produced daily in Pakistan can be treated with effective microorganisms (EM) for producing EM-Biofertilizer for crop production reducing pollution and creating healthy environment.