It has the consistency of toothpaste and looks like soggy newsprint. For years, it vexed thousands of families in Montgomery and Prince George's counties. Now it delights gardeners from Baltimore to La Plata.

Sludge, especially the 200 tons of the treated sewage trucked daily from the District to a controversial composting plant near Calverton, is hardly pretty. Suddenly, however, it's almost respectable here.

Residents of Calverton, a community of 25,000 that straddles the Montgomery-Prince George's border, once scorned the Washington Suburban Sanitary Commission's planned composting plant as a smelly health hazard. Today, five months after converting its first batch of sludge to rich fertilizer, the $27 million facility has at least temporarily won the grudging approval of its neighbors.

"It's an impressive site, no question about it," said James Vaughn, 49, a microbiologist with the U.S. Department of Agriculture whose Beltsville home is less than two miles from the Calverton plant. "I'm withholding judgment on how it's going to work in the long run, but it's obvious that WSSC and Montgomery County are making a real effort to do their best."

Bruce K. Donaldson, a Calverton resident who filed a lawsuit in the late 1970s with Vaughn and others to block the plant's construction, agrees. "Let's face it: the facility is there," said Donaldson, 51, an aerospace engineering professor at the University of Maryland.

"If things at the plant go wrong, WSSC will have egg all over its face," Donaldson added. "We want it to succeed."

So do WSSC and Montgomery County officials, who recently held an open house at the Calverton plant for skeptical area residents. The event drew 120 people, most of whom were favorably impressed with the facility, according to both sides.

"The opponents of the plant did everything they could to stop it, but a lot of their fears have not materialized," said Chuck Murray, a Montgomery County environmental planner who helps oversee the facility's operation.

Unlike the malodorous Dickerson plant, a now-defunct sewage treatment facility in western Montgomery, Calverton has produced virtually no rancid odors, said Murray and nearby residents. Officials said that the secret lies in sophisticated odor controls and the composting procedure itself, which works essentially like this:

Sewage from WSSC's Blue Plains treatment plant in the District--heavily doused with lime to kill odor-producing bacteria--arrives in Calverton, where it is mixed with wood chips. The mixture, shoveled into huge piles over perforated air hoses, "cooks" in its own 130-degree heat for three weeks. The compost is stored in giant open-air sheds; the air hoses help bacteria decompose the sludge into organic fertilizer.

Giant mechanical sifters later shake the wood chips from the mix, which then is allowed to age for 30 days. On a day last week when temperatures reached the mid-90s, a visitor standing in the composting shed could detect a strong odor of ammonia from the sludge, but no odor in the open air.

WSSC spends $4 million to $5 million a year to compost sludge at the plant, Murray said. It costs the bicounty water and sewer commission $35 to convert one ton of sludge into one cubic yard of compost. Despite an aggressive marketing campaign--the compost is sold under the trade name CompPRO and is available at dozens of garden supply dealers in Maryland and Virginia--WSSC recovers only $4 a cubic yard.

"It is not a money-making proposition, but it's not out of line with the costs of alternate treatment methods," said Murray, who indicated WSSC probably will raise the wholesale price of the compost.

CompPRO has won praise from area garden supply shops, where a cubic yard can fetch as much as $30. "We've gotten real good response with it," said Neil Meiners, manager of the J.H. Burton & Sons Nursery and Garden Center in Olney. "People usually come back for more." Eventually, WSSC will double its output of compost because Montgomery County is under a 1978 federal court order to dispose of 400 tons of Blue Plains sludge daily. Some residents said they fear the increased production could increase the chances for odor in the area.

"There is the potential for environmental problems like odor and bacteria in the air," said Edward Fasimpaur, 59, a retired postal inspector who lives near the plant. "So far, we haven't experienced anything from the plant. Everybody has their nose in the air, but the plant's been a big nothing. May it stay that way."

Vaughn, who repeatedly urged WSSC officials to completely enclose the composting operation, said he worries spores of a fungus found in the tons of wood chips pose a potential health hazard to residents. The fungus, called Aspergillus fumigatus, is commonly found in wood products but can be dangerous to some people's respiratory system, officials said. Murray said WSSC takes regular air samples to monitor Aspergillus levels, and so far it has found no problems.

"Those of us who fought the Calverton plant like to think we have a better facility than we would have if we hadn't sued," Vaughn said. "Perhaps there's an air of resignation. We just have to wait and see if the plant works over time."