Characteristics of waste generated in stone processing industries, impact of its current disposal practices and waste recycling potential were assessed by field studies. The physical and chemical characteristics of waste are comparable to construction materials like sand and cement. The environmental issues due to the disposal of waste including that on ambient air quality were identified at respective disposal sites. It was found that the waste can be used to replace about 60% of sand and 10% of cement in concrete. Similarly the waste can replace 40% of clay in clay bricks with affecting its compressive strength.