Wood fiber sludge is a by-product of the pulp and paper industry, and 750,000 tons are generated per year in Finland. When aqueous fiber sludge (solid matter content 10 to 20%) is modified with water and enzymes, it is called biotechnologically modified fiber sludge (BMFS). So far, native fiber sludge has been only a waste material in Finland, but according to a new waste law, its waste tax is 70 € per ton. According to the present EU and Finnish strategies on waste materials, circular economy, and material-efficiency, all waste must be utilized primarily as material (reuse, recycling) and secondarily as energy. For these reasons, it is very important to develop new eco-, cost- and material-efficient utilization methods for this aqueous “pure waste” instead of landfilling and combustion. Continuing earlier experiments, which proved that BMFS is a good and efficient binding agent for combustion pellets, BMFS was studied in new utilization applications such as bedding pellets for horses as well as a road and horse riding hall dust binding agent. In laboratory measurements and field experiments, BMFS is a very efficient dust-binding agent and effective binding agent for bedding pellets.