The disposal of wastewater treatment sludge generated at the Radford Army Ammunition Plant (RAAP) is a serious problem. The sludge is produced by neutralizing spent acid contained in the wastewater with lime, and consists principally of very finely divided wet gypsum (calcium sulfate dihydrate). Although the sludge is presently being disposed of in a landfill, the sludge is difficult to handle and convert into a load-bearing material. Therefore an alternative method of disposal is being developed and evaluated. The alternative method involves drying and granulating the sludge, followed by high temperature calcination in a fluidized bed reactor to recover usable sulfur dioxide and lime. If the method is adopted, these products would be used within the plant with considerable cost savings. The sulfur dioxide would be added to the feed stream of an oleum manufacturing facility and the lime would be reused in wastewater treatment.