This research was accomplished to evaluate possibility of using paper sludge for the raw materials of wood based panel products. The experimental panels were manufactured by four mixed ratios, the proportion of paper sludge to wood particle: 20:80, 30:70, 40:60, 50:50% (oven dry weight basis) and by three composition types, sludge-particle mixed board, three layered sludge-particle board and three layered particle board. They were tested mechanical (bending strength and internal bond) and physical properties (water absorption, thickness swelling and linear expansion). From the results they were shown that bending strength of mixed and three layered sludge-particle board were decreased with increasing of composition ratios of sludge. And the mechanical and physical properties of the boards of three layered composition types have superior to those of mixed composition type. Although composition ratios of sludge increased, the internal bond strength and dimensional stability of sludge-particle board not decreased quantitatively. We concluded that the mechanical and physical properties of three layered sludge-particle board were similar w those of three layered particle-board (control) made by our laboratory design. Therefore, it was recognized that paper sludge can be used as potential raw material in particle-board manufacturing industry.