The paper deals with utilization of biomass of Jatropha hulls for production of bioactive compost. In the process of Jatropha oil extraction, a large amount of hull waste is generated. it has been found that the direct incorporation of hull into soil is considerably inefficient in providing value addition to soil due to its unfavorable physicochemical characteristics (high pH, EC and phenolic content). An alternative to this problem is the bioconversion of Jatropha hulls using effective lignocellulolytic fungal consortium, which can reduce the phytotoxicity of the degraded material. Inoculation with the fungal consortium resulted in better compost of jatropha hulls within 1 month, but it takes nearly 4 months for complete compost maturation as evident from the results of phytotoxicity test. Such compost can be applied to the acidic soil as a remedial organic manure to help maintaining sustainability of the agro-ecosystem. Likewise, high levels of cellulolytic enzymes observed during bioconversion indicate possible use of fungi for ethanol production from fermentation of hulls. (C) 2008 Elsevier Ltd. All rights reserved.