This study has analyzed the generation and characteristics of solid waste in Dhaka city, along with the associated environmental impacts and existing solid waste management practices. Special focus was given on the effect of composting on final disposal of solid waste and effect of landfill site location on transportation cost. An estimate of the future generation rate indicates that the present generation rate of 3500 tons/day may exceed 30 thousand tons/day by the year 2020.The mixed waste dumped at dumping sites is characterized with high organic content and high moisture content (about 80% and 50-70% by weight, respectively). According to required landfilling areas, projected assuming 50% collection efficiency, on the year 2020, land requirements with composting of 40-80% of the organic wastes range from 167.11 acres/yr. to 96.97 acres/yr., while that without any composting stands at 206.31 acres/yr. With composting, the peak rate of greenhouse gas methane generation would be as low as half of that for without any composting. Results from this study shows that the imminent selection of dumping sites away from the city center due to unavailability of land and/or higher land price will induce three times as high daily waste transportation cost as compared to that at present.