Latex sludge, a major precipitation byproduct of concentration process in natural rubber industry is chemically magnesium ammonium phosphate formed when diammonium hydrogen phosphate is added to field latex for improving its quality by reducing its magnesium content. Detailed investigations on the characterization and agronomic relevance of this phosphorus rich material were undertaken by the authors during 2002-'04 at the Instructional Farm attached to College of Agriculture, Vellayani (Kerala, India) which is geographically 8° 5' north latitude, 77° 1' east longitude and 29 M above MSL. Basic analysis of this neutral material (pH 6.49) showed that it contains 6.05 per cent nitrogen and 6.86 per cent magnesium besides a total phosphorus content of 35.98 per cent of which 13.00 per cent is water soluble and 36.00 per cent citrate soluble. Four month soil incubation studies showed that based on the phosphorus release pattern, latex sludge is comparable or even superior to two other conventionally used commercial phosphatic fertilizers, Rock Phosphate (RP) and Super Phosphate (SP). For field confirmation of the laboratory results, two pot culture studies (1 main + 1 residual) in completely randomized design with chilli (Capsicum annuum L.), a crop with high phosphorus demand, were undertaken. The soil used was sandy loam (Vellayani Series–Typic Kandiustult), acidic in reaction (pH 5.63), high in organic carbon (0.63 %) and available phosphorus (91.28 kg ha-1), but low in available nitrogen (215.13 kg ha-1) and available potassium (91.84 kg ha-1). The treatments were fixed so as to compare the effect of phosphorus supply to the crop from latex sludge against that from SP and RP when each was used singly or when latex sludge was used in different combinations with the other two. Statistical analysis of the biometric characters of the crop namely growth (plant height, number of leaves and branches, leaf area and days to flowering), yield (number of fruits per plant, length, girth and weight of fruit and fresh yield per plant) and quality (ascorbic acid, capsaicin, oleoresin and protein contents) showed that all these traits were favourably disposed towards the treatment combination in which the crop's phosphorus requirement was met equally by latex sludge and RP (half-half). This treatment recorded either significantly the highest values for most of these characters or values which were statistically on par with highest. Economic analysis as revealed by working out the cost-benefit ratios also supported this. The results of the study hold promise as an apparent feasible solution to the twin problems of waste disposal and fertilizer scarcity in any developing country like India. Apart from cost effectiveness this ecofriendly cheap throw away material gains supremacy over the expensive commercial fertilizers now popular in market which have limitations like occasional unavailability, heavy metal content and unsuitability to certain soils and crops.