Composting was applied as a bioremediation methodology for the reclamation of dredged sediments of Isnapur, Khazipally and Gandigudem lakes polluted with industrial wastes. The present study is an attempt to elaborate upon organic matter transformations and define the parameters for product maturity adapting chemical and spectroscopic methods during composting. The stability and maturity of sediments were evaluated by assessing parameters like C/N ratio, nitrification index (NH(4)-N/NO(3)-N), water-soluble organic carbon concentration, CO(2) evolution rate, cation exchange capacity and indices such as humification index, E4/E6 ratio, compost mineralization index (ash content/oxidizable carbon), germination index, dehydrogenase, polyphenoloxidase activities and FTIR spectroscopy. The results showed that the changes in the above chemical and biological parameters can be employed as reliable indicators of stability and maturity. The FTIR spectra revealed enrichment in the aromatic groups and a degradation of the aliphatic groups indicating stabilization of the final compost.