UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 8-K

                                 CURRENT REPORT
                       Pursuant to Section 13 OR 15(d) of
                       The Securities Exchange Act of 1934

        Date of Report  (Date of Earliest Event Reported):  June 25, 2007


                        N-VIRO INTERNATIONAL CORPORATION
             (Exact Name of Registrant as Specified in its Charter)


     Delaware                         0-21802                   34-1741211
(State or Other Jurisdiction of  (Commission File Number)     (IRS Employer
Incorporation or Organization)                               Identification No.)


     3450 W. Central Avenue, Suite 328
     Toledo, Ohio                                             43606
  (Address of principal executive offices)                  (Zip Code)

      Registrant's telephone number, including area code:    (419) 535-6374

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))

       __________________________________________________________________



ITEM  8.01      OTHER  EVENTS

On  June  25,  2007, N-Viro International Corporation (the "Company") received a
favorable  ruling from an arbitrator regarding a Demand for Arbitration filed in
June  2005 by J. Patrick Nicholson, the Company's former Chief Executive Officer
and Chairman of the Board. Mr. Nicholson filed a Demand for Arbitration based on
a  claimed  breach  of  a  Consulting  Agreement  dated August 28, 2003 with the
Company.  In  July  2005,  the  Company  terminated  for  cause  his  Consulting
Agreement.  Mr.  Nicholson  was being paid an aggregate of over $92,000 per year
under  the Agreement, exclusive of any other payouts earnable. In November 2005,
Mr.  Nicholson  filed an amended Demand for Arbitration. A hearing on the matter
was  held  with  an  Arbitrator  between  January  and  April,  2007.

The  Arbitrator  has  ruled the Company was legally justified in its termination
for  cause  of  Mr.  Nicholson's  Consulting Agreement, in addition to not being
liable for any additional payouts that could have been earnable by him under the
Agreement.  The  Arbitrator specifically held that, "Based on the record in this
matter  the  undersigned  holds that [N-Viro's] Board of Directors acted in good
faith  with  respect  to  its  action to terminate the 2003 Consulting Agreement
under  the  "menacing"  provisions  of Paragraph 18.02."  All claims made by Mr.
Nicholson  under the matter were then dismissed with prejudice in their entirety
by  the  Arbitrator.  The  Arbitrator  also  elected  not to award legal fees to
either  party  in  the  matter.



                                    SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                         N-VIRO INTERNATIONAL CORPORATION

Dated:          June 28, 2007            By:       /s/  James K. McHugh
                -----------------                  ----------------------
                                                   James K. McHugh
                                                   Chief Financial Officer