Anaerobic digestion of organic matter is gaining importance due to interest in biogas recovery, plant nutrient enriched slurry and environmental protection.  During the past three decade of green revolution in India, there is increasing concern about environment deterioration and decreasing soil health and fertility.  Use of organic manure is therefore an essential approach towards restoring environment and soil productivity.  Biogas slurry enriched with distillery sludge can be a new source of organic manure in areas where biogas technology is introduced because distillery sludge contains higher quantity of nitrogenous compound and methanogenic bacteria.  Laboratory scale digesters of 4 liters capacity with 2.5 liters working volume were set up in batch digestion.  Cattle waste was supplemented with 0, 5, 10, 15, & 20% distillery sludge and digestion was initiated by 10% inoculum from anaerobic digestor plant.  Therefore it is concluded that 20% distillery sludge supplementation with cattle dung can be utilized for improved biogas recovery as well as potent organic manure.