A six‐week study was conducted on vermicomposting of textile sludge spiked with cow dung at a dry mass ratio of 2:3 by epigeic earthworm Eisenia fetida, with variable population densities (40, 80, and 120 earthworm/kg dry substrate). The earthworm characteristics and metal content of the substrate were observed at the beginning and the end of the experiment, whereas particle size, pH, electrical conductivity (EC), volatile matter (VM), total organic carbon (TOC), and total Kjeldhal nitrogen (TKN) were determined at every week. No mortality of E. fetida was found during the composting process. A high rate of cocoon or egg production (~4 cocoon earthworm−1) was evident in the most populated substrate. However, overcrowding affected the production of hatchlings, resulting in 5.57–1.03 hatchling earthworm−1 from the lowest to the highest population densities. Growth of the adult earthworm was also retarded, which varied from 0.44 to 0.35 g earthworm−1 with the increase of population density due to high competition for food. The particle size of the substrate material was reduced from 4 mm to 0.6 mm in the most populated substrate which was ascertained to be the most efficient option to reduce substrate particle size. All final substrates gained a C/N ratio lower than 20 except the lowest populated substrate. The change in metallic contents incorporated in substrates showed reverse relationship with the population. Though the overall result demonstrated that the physicochemical properties of the substrate materials are favored by the higher population density, it showed negative effect on the biological activities of earthworms.