This study develops economic impact models of solid waste system in California and determines statewide and regional economic impacts of waste disposal and diversion. The study estimates that the 1999 economic impacts of waste disposal and diversion were approximately $9 billion in output, $21 billion in output impacts, $8 billion in total income impacts, $11 billion in value-added impacts, and 179,000 additional jobs. The study also finds that if all waste generation were disposed instead of being diverted at the 1999 rates, the statewide economic impacts would be 17 to 20 percent lower. While the relative impacts for individual regions vary because of differences in material flows and business and industrial infrastructures, generally, diversion in California generates larger economic impacts than disposal. Average output and value-added impacts more than double when materials are diverted rather than disposed statewide, and output impacts, total income impacts, and job impacts also nearly double. Differences in regional impact suggest that creating markets to accept more recyclable and greenwaste materials is the key to stimulating more economic activities and higher economic impacts in the state.