Present investigation reveals the energy yield, environmental issues, and waste management through optimal two stage anaerobic digestion process. The various process parameters (TKN, pH, C/N ratio, moisture content etc.) need to control in such a manner that in less retention time, more biogas yield to be recorded with high quality manure. Present disposal of municipal solid waste (MSW) through incineration / landfills creates air, soil and ground water pollution. Presently, modern anaerobic digestion prefers two stage technology worlds- wide, because major environmental problems eliminated with the optimum biogas yield. The future challenges to be met are production of Bio H2, Bio fuel, using various substrates along with MSW.