More than 50 000 wastewater treatment plants are operating in the European Union, producing more than 7.9 million tons of dry solids per year. The amount of sewage sludge will continue to increase as the Urban Wastewater Treatment Directives continues to be implemented in the different member countries. It is now undeniable that various toxic organic compounds, such as surfactants, hydrocarbons and residues derived from plastics are found in sewage sludge. The BIOWASTE project, under the EU 5th framework programme, offers an integrated study of xenobiotics throughout sludge recycling, using a combination of complementary approaches such as biotechnology, eco-toxicology, plant toxicology, analytical chemistry, microbiology, mathematical modelling, life cycle costing and life cycle analysis. This paper presents an overview of the results as well as their implication on the current EU regulatory work in progress concerning sewage sludge application. Particularly, two major findings are here detailed: the isolation, characterization and use of anaerobic xenobiotic-degrading microorganisms, and the modelling of the fate and impact of xenobiotics on anaerobic digestion.