Changes in extracellular enzyme activities and microbial populations were studied during the normal composting and vermicomposting of fruitpulp, vegetable waste, groundnut husk and cowdung. The microbial numbers and their extracellular enzyme profiles showed relative variation and were found increasingly more abundant in vermicompost than in normal compost leading to the conversion of agricultural waste into value added product. In vermicompost, the maximum enzyme activities (cellulase, amylase, invertase, protease and urease) were observed during 21-35 days. The cellulase, amylase and protease activities of vermicompost reached the maximum values by 28th day of 1175, 825 microg reducing sugar g(-1) hr(-1) and 28 micro mol of aminoacid g(-1) hr(-1) of vermicompost samples respectively. Similarly the invertase and urease activities reached to peak values of 876 microg reducing sugar g(-1) hr(-1) and 197 microg NH4(+)-N g(-1) ha(-1) sample on 35th day respectively. Most of the enzymes showed correlation with change in number and types of different microbial groups like bacteria, fungi and actinomycetes during vermicomposting with maximum number of 126 x 10(6), 28 x 10(4) and 93 x 10(5) CFU g(-1) sample respectively. In contrast delayed greatest enzyme activities were observed on 42-49th day i.e., last days of normal composting. Earthworms stimulated biochemical activity and nutrient cycling by 40-45% contributing to the reduction of period of degradation of agricultural wastes resulting in maturation of vermicompost by 28th day.