The things we build our homes with! The late Nestor Noe founded San Diego-based AFM 25 years ago because he was tired of seeing colleagues at his paint company getting sick as a result of exposure to toxic materials. Then a new and even scarier problem emerged: More and more medical professionals were reporting that patients were suffering mysterious allergylike reactions to their everyday environments. AFM connected with doctors in the new field of environmental medicine and began designing a line of building and consumer products--paints, stains, wood finishes, sealers, cleaners--that would not sicken people with chemical sensitivities. As awareness about indoor air pollution rose in the 1990s, the company realized the size of the opportunity and embraced the green label wholeheartedly. Its products are available at green building supply stores nationwide.

Now AFM's standards for what makes a product "safe" or "nontoxic" are more stringent than those of competitors. "Chemically sensitive people are still something we're structured around," says CEO Sam Goldberg. "The goal is that anything we produce will work for those people." If that happens to result in a healthier environment for everyone, so much the better.

There's a saying in the world of prefab housing: Having your house built on-site is like having your car built in your driveway. The point is waste. The building industry creates 136 million tons of waste annually, much of it excess materials left in the mud on the building site.

Architect Michelle Kaufmann is making a dent in that mountain of waste. Michelle Kaufmann Designs, based in Oakland, California, has helped to usher in the next generation of prefabricated housing: ecologically astute, energy-efficient, factory-built homes with modernist verve (and with approachable prices; the total cost of a home tops out at about $250 a square foot). Because they're built indoors after meticulous planning, construction waste is essentially eliminated. And the houses are beautiful, mixing elements such as geothermal heating and cooling systems with modern touches such as clerestory windows, Cor-Ten steel siding, and gliding glass doors. Her breakthrough design, the Glidehouse, is on display at the National Building Museum in Washington, D.C.

Kaufmann has just purchased a 10,000-square-foot factory, the first facility in the U.S. dedicated to the construction of green prefabs. It will allow her to produce up to 50 houses a year, including a new line of designs, called mkSolaire, that are meant for smaller urban lots.

Croft Elsaesser knew what was causing his headaches. He worked in the building trades, applying decorative finishes to residential interiors with paints, shellacs, urethanes, and oil glazes. What all those materials have in common are volatile organic compounds, or VOCs--toxic chemicals that can damage the liver, kidneys, and nervous system. Elsaesser decided there had to be a better way. He began researching the way buildings were finished before the advent of chemicals and learned about the plasters that had been used for centuries in Europe, earthen clay mixed with sand.

Elsaesser has brought back that tradition with American Clay, the company he founded in Albuquerque in 2002. With the help of his mother, Carol Baumgartel, an interior designer and a ceramist, Elsaesser developed a line of refined clays receptive to most colors, in a range of textures, and containing none of those nasty VOCs. The materials quickly caught on among contractors in the Southwest, where people are accustomed to working with clay. And the company is fast developing a national presence. In 2004, the National Association of Home Builders honored American Clay for "a product that has the best potential to advance the cause of resource-efficient home construction." Sales for 2006 are projected to hit $2.5 million.

Elsaesser continues to look to the past for inspiration. He recently eliminated polypropylene plastic linings from American Clay's packaging in favor of flour sacks. And the best fringe benefit of all? No more headaches.

Environmentally oriented builders love bamboo. It is the world's fastest-growing woody plant (some species grow a foot a day), which means a bamboo stand can yield up to 25 times as much timber in a given period as a comparable stand of trees. It's also tough, so it's perfect for floors.

David M. Knight, CEO and co-founder of Teragren (his wife, Ann, handles the marketing), may not have been the first to recognize the advantages of using bamboo. But Teragren, which is based on Bainbridge Island, Washington, is leading the way in exploiting its economic potential. Floors are just the beginning. Teragren's bamboo is being used for walls, furniture, and retail displays, and the company has begun producing bamboo building materials such as trusses, joists, and decking.

Teragren uses only sustainably grown bamboo--the roots are left behind for regeneration. The adhesives used in production contain close to no formaldehyde. Sales at the 18-person company are growing at 40 percent a year; David Knight expects to reach $14 million this year. "You can't build an environmentally and socially responsible business," he says, "without it being economically responsible as well."

A few years back, Miranda Magagnini and Peter Strugatz, two entrepreneurs who had become veteran investors in socially conscious businesses (including two on our list: Stonyfield Farm and Zipcar), came across a failing company that made gorgeous terrazzo-style slabs for countertops from recycled glass and concrete. In 2003 they bought the company's assets at auction and rechristened it IceStone. They raised more than $6 million from like-minded social entrepreneurs such as Ben Cohen of Ben & Jerry's to revamp the company's aging manufacturing plant in Brooklyn, New York, and provide scale to the original vision.

IceStone now makes a range of products--slabs for wall coverings and flooring in addition to countertops--in a 55,000-square-foot environmentally sophisticated manufacturing plant that employs green practices such as day lighting and graywater recycling. The machinery uses soy-based machine lubricants. Manufacturing waste is recycled into road surfacing. The plant will recycle 2.6 million pounds of glass in 2006.

The company's customers include Starbucks (NASDAQ:SBUX), Whole Foods (NASDAQ:WFMI), and Equinox Fitness clubs--none of which is choosing IceStone just to do the right thing. "Our customers like our story, but they love the product," says Magagnini. "This isn't like buying a bottle of Honest Tea. Buying a countertop isn't something you do lightly."

The market in green building products is expected to double, to about $20 billion, by 2010, and IceStone is on a faster ride than its owners anticipated. "We're overwhelmed with demand," says Strugatz. "As a lot of people tell us, we have a lot of good problems."

Talk about a virtuous cycle. IBC Engineering Services, based in Waukesha, Wisconsin, specializes in devising novel ways to make a building's mechanical systems more efficient, thereby freeing up money for energy-efficient insulation, roofing, and windows. Those architectural improvements require fewer resources and make a smaller mechanical system possible, which ends up saving money for the client. "No matter how green a building is, it still has to make economic sense," says CEO Fieena Zvenyach. "Very few clients are keen on throwing money at a project just because it's a good idea."

Since founding IBC in 1991, Zvenyach and her husband, Lev, have worked on hundreds of green building projects, most notably the groundbreaking Chicago Center for Green Technology. For that project, IBC designed a geothermal heat pump, which stores heat deep in the ground during the summer and sucks it out in the winter. IBC has brought that kind of resourcefulness to other projects, too. For a lakefront war memorial and art museum in Milwaukee, the company--which has 15 employees and expects 2006 revenue of $1.5 million--came up with the idea of using cold water pumped directly from the bottom of Lake Michigan for the air conditioning system. It saves $100,000 a year. "Innovation is not necessarily new technology," says Lev, "but changing the way you look at things."