Massive volumes of solid waste are produced in the United States. Options for disposal are limited. Incineration and recycling are frequently proposed solutions. However, incinerators and waste recovery facilities, such as scrap smelters, generate hazardous air pollutants and toxic ash. Their potential hazards to health have not been adequately assessed. To illustrate the policy issues surrounding waste incineration and resource recycling, we examine the case of U.S. Metals, a scrap metals recovery plant in Carteret, New Jersey. This plant emitted 20 kilograms of dioxin in its 25 years of operation. It also released 86 tons of lead annually; nearby air lead levels were repeatedly in violation of standards. Construction of a tall stack caused export of toxic emissions from the plant to Staten Island, New York; high concentrations of lead were documented in surface soil on Staten Island. Because neither the State of New Jersey nor the U.S. Environmental Protection Agency were willing to regulate emissions from the plant, New York, the downwind state, was forced to sue U.S. Metals in federal court. The suit resulted ultimately in closing the plant. The case illustrates the difficulties in regulating pollution across state lines, a difficulty compounded by the abdication of responsibility by state and federal agencies. Further, the episode appears paradigmatic of a disturbing trend by state and local governments to locate waste combustion facilities at sites which will resolve problems of solid waste by encouraging export of airborne pollutants across regulatory boundaries.