A multi-stage process and system for treating organic waste materials includes steps of hydrolyzing the materials in an anaerobic vessel, transferring the liquid product of hydrolysis to an anaerobic digester, and further decomposing the waste materials under aerobic conditions to yield a compost product usable as a soil amendment. Biogas produced by digestion of the hydrolysis liquid product may be burned to generate electricity or heat, and the liquid digester product may be recirculated for use as an inoculant to aid hydrolysis of subsequently processed batches of waste materials.