A fertile agricultural soil was amended with primary papermill sludge at rates from 0 to 267 g/kg soil. Samples incubated at 12 and 25°C displayed N immobilization proportional to the rates of sludge addition. Prior to 50 d of incubation, N immobilization was pronounced at both temperatures. Between 50 and 100 d, net mineralization began in the 33-g/kg treatment at 12°C and in the 33-g/kg and 67-g/kg treatments at 25°C. By day 150, net mineralization was evident in the 67-g/kg rate at 12°C and in the 133-g/kg treatment at 25°C. By the end of the incubation, extractable N levels were reduced from approximately 3 to 80% of the controls incubated at 12°C and from approximately 1 to 84% of the controls incubated at 25°C. A highly significant negative relationship between extractable N and sludge addition was determined at day 250. Statistical analyses indicated significant differences in the polynomial regression equations for each temperature. Total carbon mineralized was significantly increased with incremental sludge addition. Mineralized Carbon (as a percentage of added sludge C) ranged from approximately 7% in the 267-g/kg rate to approximately 24% in the 17-g/kg rate incubated at 12°C, and from 17% in the 267-g/kg rate to 65% in the 17-g/kg rate incubated at 25°C. Organic matter determined on day 250 indicated that the 133− and 267-g/kg rates significantly increased organic matter content at both incubation temperatures. Results suggest that, with proper management, papermill sludge could be useful in conservation of soil N and organic matter.