Dry olive cake, alone or mixed with biosolids or cattle manure, was used to assess the ecological management of a degraded soil. These olive by-products had been stabilised previously for 160 days in a vermicomposting process. Unprocessed and vermicomposted products were used as organic mulches in a greenhouse experiment. The control contained only degraded soil. Soil biochemical activities (dehydrogenase, urease and phosphatase) were studied in the rhizosphere of pepper (Capsicum annuum, L.). In addition, the changes in plant growth and nutrient content of C. annuum following addition of mulches were measured. The addition of dry olive cakes as organic mulches increased P concentration in pepper leaves from 1.5 to 4.5-5.7 g kg(-1). Potassium concentration in leaves increased from 51 to 65-85 g kg(-1), depending on the mulch assayed. In contrast, N concentrations were unaffected. Rhizosphere dehydrogenase activity increased by 1.5- to 2.5-fold by incorporation of mulches, either vermicomposted or not, when compared with the no-mulch control. This suggests that microbial numbers and potential activity in the rhizosphere were related to the addition of organic materials. Urease activity in the rhizosphere was inhibited, at least three-fold, when unprocessed products were used as organic mulches, but this inhibitory effect disappeared when unprocessed dry alive cakes were previously vermicomposted. Phosphatase activity was stimulated by the presence of organic mulches, especially if they were previously vermicomposted. Dry olive cake should be vermicomposted prior to use as mulching media in horticultural crops. (C) 2000 Elsevier Science Ltd. All rights reserved.