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Composting is a traditional agricultural practice to recycle organic waste. However, due to ongoing rapid urbanization and changing life-styles, organic waste lost its traditional link to the rural agriculture. Instead, organic waste became a serious environmental issue in developing countries. This paper therefore discusses the experiences of two different cities in Asia (Surabaya, Indonesia, and Matale, Sri Lanka) in promoting organic waste recycling. The paper identifies the potential of decentralized composting in realizing economic benefits such as generating incomes, creating job opportunities for the urban poor, and minimizing costs for municipal governments. The paper also identifies environmental benefits by reducing municipal waste for landfills and greenhouse gas emission. Social benefits include the resulting improvements in the quality and coverage of waste management, quality of life, education and social capital. However, for the successful application of decentralized composting to realize a green economy, it requires strong political will and commitment and to utilize integrated policy instruments, such as economic instruments, regulations and information.