Water hyacinth (WH) is considered as the worst aquatic weed in the world because of its rapid growth and fast spread into new areas of fresh water bodies. We investigated the potentiality of using WH as a raw material for production of handmade paper and compost in Bangladesh. Potash pulping was done using potassium hydroxide (KOH) at different alkali concentrations (8–12%) with a liquor to solid ratio of 7:1 at 145 °C for 2 h. The pulp was bleached using hydrogen peroxide (H2O2), and pulp properties (brightness, tear index and tensile index) of bleached and unbleached pulps were analyzed following the respective TAPPI standards. The produced black liquor was mixed with WH along with kitchen bio-wastes to produce compost. The properties of the compost were tested following the published protocols, i.e., wet digestion, Kjeldahl, vanadomolybdophosphoric acid, and Flame Spectrophotometry methods. Brightness, tensile index and tear index of bleached hand sheets were found to be 37.2%, 49.2 N m/g and 6.79 m.Nm2/g, respectively suggesting significant contribution of bleaching on WH paper quality. Addition of black liquor significantly increased the nitrogen and potassium content of bio-waste compost. Thus, WH can be used as a raw material for making handmade paper while the process by-product can be supplemented to improve the nutritional quality of compost. Such cottage-industry fabrication of WH green products could be developed to control the infestation of WH in water bodies, and this technology may provide for new possible sustainable livelihood option.