Shanks Waste Services was also ordered to pay more than £10,000 costs for the offences at its Deerplay landfill site in Burnley.
The firm was convicted for eight offences seven of which it pleaded not guilty to relating to breaches of its waste-management licence.
On August 1, 2002, a resident near the Lancashire site contacted the Environment Agency to complain about an offensive smell.
Agency officers found the smell was noticeable 500 metres from the edge of the Shanks site, and bad enough to leave one of them with a headache.
The District Judge at Blackburn Magistrates Court said the most serious aspect of the case was the odour that made a local resident sick several times.
Failure to manage leachate a liquid from rotting waste and to cover and spray the site according to regulations had contributed to the smells.
Shanks landfill operations were purchased by the Waste Recycling Group in July this year and renamed WRG Waste Services. The new company picks up the fine.