The fly ash, generated as a waste material at thermal power plant, has been used as an adsorbent for treating the dye effluent. The characteristics of the dye effluent before and after the treatment are studied and compared. The sludge (color adsorbed fly ash) from the sedimentation tank has been used to replace the fly ash in the manufacture of the fly ash bricks. The strength and durability properties of color adsorbed fly ash bricks are studied and compared with conventional fly ash bricks. It is found that the fly ash effectively removes the color, TDS, hardness and other toxic elements from the dye effluent and also provides a remedy to the disposal problem of fly-ash. The strength of the color adsorbed fly ash brick is found to be good. One waste material is effectively used to treat the other material and the sludge is used in brick manufacturing, thus preserving the nature.