This study is focused on the treatment of waste sludge from a zinc chloride production in order to prepare iron-rich pigments usable for a production of glazes. In galvanizing plants,, yellow waste sludge containing significant amount of ZnO, Cl, and Fe2O3, is formed. This raw waste sludge cannot be used as a pigment in glaze. Therefore, three methods of treating this material were proposed: a) washing with H2O, b) calcination at 180 °C and washing by H2O, and c) calcination at 900 °C and washing by H2O. These methods helped to reduce Zn and Cl content up to 97%. According to X-ray fluorescence analysis percentage of Fe2O3 increased from ~41% to ~98%. X-ray power diffraction analysis confirmed the formation of α-Fe2O3 (hematite) in the pigment prepared. Scanning electron microscopy with Energy dispersive X-ray analysis showed clusters of rounded particles, and also the change in size of particles after calcination was observed. Particle size, specific surface area, and density measurements together with thermogravimetric and differential thermal analyses were performed. Pigments prepared from the waste sludge were added to transparent glaze in amounts of 1, 5, 10, and 15 wt.%. Pigment-containing glazes were applied by spraying on fired ceramic tiles and then fired at 1060 °C. Color of glazes was determined by (Commission Internationale de l’Eclairage) CIE L*a*b* coordinates as colorless, light brown shades, brown-red, brown-yellow, and deep red-brown. Comparison with colors of glazes prepared using commercial pigments was also performed. Waste sludge can be used to prepare pigments and glazes containing pigments as an alternative to commercial products.