ABSTRACT Industrial digestates from short-fibre residues, generated in paper recycling mills, are driving interest in resource recovery. This study aims to explore their potential for water recovery. Understanding particle dynamics aids in optimizing dewatering for digestate management. The particle size distribution in this study revealed significant fractions: <0.63 μm (6–20%), 0.63–20 μm (38–52%), and >20 μm (11–16%). Pre-treatment with Na4P2O7 and H2O2 enhances settling and lowers total dissolved solids (TDSs) but results in variation of size distribution. Additionally, this study investigates further water reuse in paper mills, focusing on the quality of ultrafiltration (UF) permeate obtained from the digestate of short fibres. UF permeate analysis reveals deviations from freshwater standards in paper mills. Despite effective TS removal, UF permeate falls short of paper mill water standards due to high TDSs, electrical conductivity, and nutrient concentrations, necessitating further downstream treatment with nanofiltration or reverse osmosis. A substantial reduction of permeate flux from 31 to 5 L/(m2·h) over the time indicated fouling and inefficient membrane wash. The silt density index of the UF membrane at 30 min registered 2.1, suggesting potential fouling. Further investigations on optimizing UF operations to enhance permeate flux and exploring alternative UF membranes are required.