You can use compost to prepare the soil for new lawns, or to top-dress existing lawns.
New lawns
If you intend to plant a lawn where the soil is in poor condition or has been compacted by construction activities, you’ll need a 2- to 3-inch layer of compost. If the soil is heavily compacted, you may need to use a rotary tiller to work the compost into the soil at least 6 to 8 inches. Once the new lawn is established, spread a 1/4- to 1/2-inch layer yearly to maintain the quality of the soil.
In addition, compost can play an important role when you renovate a lawn in poor condition. Either remove the existing lawn or kill it with Roundup herbicide, wait a week, and mow it as low as possible. Aerate the soil to relieve any compaction. A rented aerating machine punches small holes in the dead turf, simultaneously pulling out plugs of soil. Spread a layer of compost over the area, and lightly rake it so that it falls into the holes. Then plant the new grass. Not only does this approach take much less work and avoid bringing dormant weed seeds to the surface, but it has the added benefit of introducing air into the soil.
Existing lawns
A lawn top-dressed with 1/2 inch of compost every year or two will be healthier and will require less fertilizer and water than an unamended lawn. Fall is the best time to apply the compost, although an application in early spring is almost as effective. The best way to get the compost into the soil is to aerate the lawn either before or after you spread the material. If aerating isn’t possible, the compost will still find its way down below the surface of the soil—the earthworms and microorganisms near the soil surface will carry it down within a few weeks.