Water treatment residual (WTR) is a waste material from drinking water process. Land application is one option for Al-WTR disposal. A promising concept is application of Al-WTR and plant residue simultaneously for the rehabilitation of sandy soil quality. The objective of this study is to explore the changes in soil properties and growth of bahia grass (Paspalum notatum F.) with application rates of Al-WTR ranging from 2.5 to 10% (w/w) and pine bark compost at a constant rate of 5.0% in a pot experiment. The results indicate the soil bulk density, water stable aggregates, and saturated hydraulic conductivity were improved by Al-WTR application. The Al-WTR application alone significantly (P < 0.05) decreased available P concentration in the soil, while the decrease of P availability could not be confirmed under the co-application of Al-WTR. The co-application of Al-WTR and compost increased microbial biomass carbon (MBC) compared to application of Al-WTR alone in the soil. The rates of co-application to the soil are safe with regards to heavy metals in the soil and plant. The shoot biomass production of grass increased significantly with increased application rate of Al-WTR.