A composite board comprising a core and a paper facer sheet adhesively laminated to one face of the core, the core including a mixture of perlite, binder, and cellulose fiber, the core being formed as a water slurry with said perlite, binder and cellulose fiber being uniformly distributed therein, the perlite being in an expanded state such that its particles include internal voids and exhibit a density of about 5 to about 15 pounds per cubic foot and being present in sufficient quantity to occupy in bulk at least 50% of the volume of the core, on a weight basis, the perlite and cellulose fiber combined forming at least 25% of the weight of the core. The paper facer being laminated to the core with a water-based adhesive applied across substantially the full area of the facer, both the compressive strength of the perlite and tensile strength of the cellulose fiber being utilized by operation of the binder such that a relatively high nail-pull capacity in comparison to the weight of the composite board is achieved and sag resistance is imparted to the composite board when it is used for ceiling tile.