The production of wool is an economic burden and an issue for sheep breeders in many countries of the European Union because shorn greasy wool is defined as an animal byproduct (category 3) and must be sent to landfill as a special waste if not addressed in the textile supply chain. Nevertheless, wool is an important source of nitrogen, with high potential as agricultural renewable and sustainable organic fertilizer. To apply wool to soil, any contamination from harmful bacteria (e.g., Listeria monocytogenes and Salmonella spp.) should be excluded. In this study, we developed sheep wool pellets to test their suitability for use as an organic fertilizer. Wool was rich in N (12% of dry material) and was mixed to spruce sawdust at sawdust: wool ratios of at 2:1; 1:1 (v/v) to increase soil organic carbon. Despite the different mix of wool and sawdust, pellets were similar in size (diameter and length), and the content of the elements suited the requirements of fertilizers and did not present harmful bacteria after pelletization. Therefore, wool pellets may represent a feasible solution to provide sheep wool with an added value, introducing it in a circular economy process. However, further study is needed to test the effects of the produced fertilizing pellets in real cropping systems.