About 75,000,000 lbs of paint sludge is generated by the U.S.automotive industry each year. This type of waste and (similar streams from other industries) make significant contributions to landfills. The solution proposed by ASTER, Inc., proven feasible during the Phase I ofthis work, is to recycle the paint sludge into ingredients for automotive sealants. This new approach results in waste generated in the car manufacturing process going back into the production of cars. ASTER's method is to utilize waste from paint sludge and to compound these materials into a sealant that has been demonstrated to meet current automakers specifications for printable sealants. ASTER has already developed recycling technology and a sealant formulation prototype containing 50%of recycled paint waste solids. The development proposed for Phase II will bring the recycling technology into initial commercial application for both paint waste and sealant industries, and establish the basis for full commercial expansion through the development of similar industrial waste streams.