With sustainability dominating the industry, recycling the generated waste from different processes is becoming increasingly important. This study focuses on recycling waste generated during aluminum anodizing waste (AAW) in friction material formulations for automotive braking applications. However, before utilization, the waste needs to be pre-treated, which mainly involves drying. Hence, four different industrial drying methods were studied to dry the AAW, and the corresponding characteristics were observed by evaluating its residual humidity and crushability index. The waste powders were further characterized using FT-IR and SEM/EDXS to understand their constituents. The initial analysis showed that the waste subjected to the drying process P2 and P1 with the lowest final humidity fetched the most desirable results, with P1 having the simpler drying procedure. The AAW powders were added in a commercial friction material formulation at 6 and 12 wt.% and subjected to friction, wear, and non-exhaust particulate matter analysis. The worn surfaces were analyzed using SEM/EDXS evaluation to understand the extension and composition of the deposited secondary contact plateaus. It was seen that the 12 wt.% addition of waste processed using the P1 technique provided the most satisfactory friction, wear, and emission characteristics, along with expansive secondary contact plateaus with a good contribution of the waste in its formation. This study showed a good relationship between the processing method and a formulation’s tribological and emission characteristics, thereby paving the way for using this drying method for other waste requiring pre-treatment.