Efficient use of manure nutrients by crops is necessary to minimize losses to the environment. This field study examined the possibility of replacing side-banded mineral P with precision-placed high-P sludge (6.2-11.0% dry matter) obtained after settling dairy manure slurry. The sludge was injected at about 30 kg P ha (36.0-51.2 m ha) into the soil at corn row spacing, and the corn was planted 5, 10, and 15 cm beside the injection furrow. Controls included no added P and side-banded commercial P fertilizer. The treatments were tested on corn with low and high root colonization by arbuscular mycorrhizae (AM). The study showed that sludge did not impede AM root colonization, corn germination, or seedling growth. Corn plants with both high and low levels of AM colonization responded to the sludge from the three-leaf stage and showed the greatest benefit at the six-leaf stage. Corn responded more to sludge placed at 5 than at 15 cm from the corn rows, whereas the response at the 10-cm spacing was intermediate. There was little difference in seedling growth or final harvest parameters between the side-banded fertilizer P and the 5-cm sludge treatment. The results show a new way to use manure nutrients, namely precision-placement sludge for corn. This may obviate the need for chemical fertilizers for improving farm nutrient balances. Other anticipated benefits are less energy use for hauling and injection of the sludge fraction and reduced risk of nutrient loss by runoff and volatilization (ammonia) and nuisance odors due to injection.