Pressmud is a by-product of sugar industry. For every 100 tonnes of sugarcane crushed about 3 tonnes of pressmud cake is left behind as by-product. It is used as both a soil reclamation agent as well as a soil conditioner. But presence of wax in pressmud stimulates a decrease in soil quality and porosity after its repeated applications. Present study was undertaken to analyze the physical and chemical characteristics such as pH, NPK organic carbon, organic matter, moisture content etc. of raw pressmud as well as pressmud from which the wax is extracted by solvent recovery, and also water holding capacity of Loam soil by applying different percentage of waxed and wax extracted pressmud. It was found that the water holding capacity of soil containing dewaxed pressmud was high as compared to waxed pressmud and in the range of 58.39 to 92.43% in the dewaxed pressmud where as for wax containing pressmud it was 49.39 to 86.63%. The C: N ratio of dewaxed pressmud was high, and was 18.54% as compared to that of waxed pressmud. The composting processes improve the physical structure and lower the C: N ratio of the pressmud and leads to reduction in C: N ratio ie 16.53% of dewaxed pressmud after composting. However the physico-chemical parameters of the composted waxed pressmud were not significantly higher than those of composted dewaxed pressmud. So it can be conclude that dewaxed pressmud are used as fertilizer in agriculture field.