The international shellfish farming industry has a growing problem with respect to sustainability: the shells, a by‐product, are currently being mostly wasted to landfill. Instead, this calcium‐rich resource can be used to produce lime [calcium oxide (CaO)] and then used to remove phosphate from rural wastewaters. Powdered mussel shell was heat treated to form lime. Two different shell particle sizes (fine, 53–106 µm; coarse, 212–250 µm) as well as various pyrolysis times, heating rates, pyrolysis temperatures and shell concentrations were used to determine the effects of these parameters on the lime formation and subsequent phosphate removal from a synthetic wastewater. Furthermore, the mechanisms of phosphate removal were determined by quantifying the phosphate content in all components before and after reaction with the synthetic wastewater. It was found that with excess of partially calcined pyrolysed shells, at a concentration of 5 g l⁻¹, more than 95% phosphate removal was achieved, irrespective of particle size or pyrolysis conditions. When using optimally heat‐treated shells (particle size: 53–106 µm, pyrolysed for 1 h at 750 °C), it was possible to achieve over 90% phosphate removal using just 196 mg l⁻¹ of shell. For the pyrolysed shells, the main mechanisms of phosphate removal were homogeneous nucleation to form a suspended precipitate, as well as adsorption and heterogeneous precipitation on the surface of the remaining calcite shell particles. Copyright © 2010 Curtin University of Technology and John Wiley & Sons, Ltd.