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The processing of steel waste slag from the black metallurgical sector seriously threatened the ecology. To counter these dangers, appropriate detoxification methods were required. Vermitechnology was one such strategy that could successfully convert this industrial waste into nutrient-rich products suitable for use in agriculture. This research primarily focuses on employing vermitechnology for the transformation of waste steel slag into vermicompost and to determine changes in microbial composition, nutrient cycling, and metal detoxification facilitated by earthworms (Eisenia fetida). Earthworm populations in steel waste vermibeds (sw-vermibeds) increased by 2.87–3.07 folds. T1(SW + CD-1:1) comparatively showed increased levels of nutrients such as nitrogen, phosphorus, and potassium. Microbial and enzymatic parameters were more pronounced in treatment T1. The findings of phospholipid fatty acid (PLFA) diversity demonstrate microbial diversity and fatty acid composition. Based on PLFA Sobol Sensitivity Analysis (SSA), PUFA and cyclo were the most sensitive inputs to the presence of heavy metal (HMs) concentrations in SW. In accordance with Taylor-based modelling, R-tree, and Mars were the most trusted regression models for predicting HMs toxicity on microbes. The bioavailable metal fractions of HMs (Fe, Ni, Cd, Cu, Pb, and Cr) decreased by 61–83%. The correlation was performed for 0 and 90 days for metal microbial interactions r (0 days), [BSR vs Fe, Cd, Cu, Ni = −0.99, −0.82, −0.43, −0.99] and r (90 days), [FDA vs Fe, Cu, Ni = −0.97, −0.47, −0.95]. Overall, the results indicated that T1(1:1 SW + CD) provided more favorable conditions for the development of microbes and Eisenia fetida. This research presents a new perspective to the world community on the transformation of harmful steel waste slag into advantageous biological resources by introducing a novel method of employing Eisenia fetida to remediate hazardous steel waste slag. • Hazardous steel waste slag (SW) was effectively remediated by Eisenia fetida. • Eisenia fetida effectively reduced toxicity by bioaccumulating HMs in their gut. • Under HMs stress in vermibeds, PUFA and Cyclo were the most sensitive PLFA factors. [ABSTRACT FROM AUTHOR]