A greenhouse experiment was conducted to investigate the impact of sanitized sewage sludges, ATAD (aerobic thermophilic autothermic digestion) and composted, on Verticillium-induced wilt in pepper plants (Capsicum annuum L. cv. Piquillo). Two doses of ATAD (15 and 30% v/v) and three of composted sludge (15, 30 and 45% v/v) were applied to a peat-based potting mix. Unamended substrate was included as control. Half of the plants were inoculated with V. dahliae, whereas the other half remained non-inoculated. Result showed that ATAD and composted sludge increased growth and yield of non-inoculated plants. V. dahliae reduced net photosynthesis (Pn), mainly as a consequence of stomatal closure, 5 weeks after pathogen inoculation. The actual photosystem II efficiency was also reduced and consequently the electron transport rate (ETR). No photoinhibitory damage was observed at this time in diseased plants. At the end of the experiment, diseased plants showed lower plant biomass and fruit yield. ATAD sludge had little effect on the disease. Compost slightly alleviated Verticillium-induced wilt when applied at lower doses (15% v/v), which resulted in increased Pn and ETR, and higher plant biomass and fruit yield. By contrast, higher doses of compost (45% v/v) enhanced the effect of the pathogen, which was related to the high substrate salinity in this treatment.