Sludge is emerging as major polluting substance as it contains a lot of contaminants, posing both environmental and health challenges. From an environment perspective, untreated sludge can lead to soil and water contamination severely. Soil contamination results from the direct application of untreated sludge in land incorporating heavy metals, organic pollutants, and pathogens. During rainy season runoff transport these pollutants to water bodies polluting aquatic ecosystem and ground water. Incomplete decomposition of sludge emits greenhouse gases (GHGs) polluting atmosphere. From a health perspective, the sludge is a reservoir of pathogenic microorganisms such as bacteria, viruses, and fungi. Exposure can result in various diseases to human. Presence of toxic chemicals and heavy metals like Ni, Pb, and Cd in sludge can lead to significant health issues upon continuous exposure. In bioaccumulation process, contaminants in sludge enter the food chain, impacting human health over time. Addressing these challenges necessitates technological interventions like anaerobic digestion and composting, and stringent regulatory measures to ensure only treated sludge with acceptable contaminant levels finds application. By embracing safe management practices and recognizing sludge's potential for resource recovery, this environmental challenge can be turned into a sustainable opportunity, ensuring both ecological balance and public health safety. This chapter highlights the environmental and health risks associated with sludge and emphasizes the importance of its safe management and potential reuse.