An incubation study was conducted under laboratory conditions to compare the effects of soil amendment of combined paper mill sludge (PS) and decomposed cow manure (DCM) on selected microbial indicators. A lateritic soil (Typic Haplustalf) was amended with 0 (control), 20 or 80tha(-1) (wet weight) of PS or DCM. The amended soils were then adjusted to 60% water holding capacity (WHC) or submerged conditions, and incubated at 27 degrees C in dark for up to 120days (d). The microbial biomass C (MBC), the basal soil respiration and the enzyme activities of the beta-glucosidase, acid phosphatase and sulphatase were analyzed at day 15, 30, 45, 60 and 120. Compared to the unamended soil (control), the MBC, the basal soil respiration and the enzyme activities increased with the rate of PS and DCM. At similar rate, the DCM treatment increased significantly the MBC, the soil respiration and the enzyme activities compared to the PS treatment. Also, the water regimes affected the microbial activities. At 60% WHC, the MBC and soil respiration increased during the first 30d and decreased thereafter. The enzyme activities showed similar trends, where they increased for the first 60d, and decreased thereafter. In contrast, under submerged condition, the MBC and enzymes activities declined during 120d, whereas the soil respiration increased. Compared to the control, the used of PS and DCM had no negative impact of the soil microbial parameters, even at the highest application rate. Long-term field experiments are required to confirm these laboratory results.