In this paper, a comprehensive municipal sludge oxy-fuel combustion numerical simulation model taking various processes, including combustion, heat and mass transfer into account was established. The model’s precision has been validated through the inversion analysis of experimental data from sludge oxy-fuel combustion tests. A quantitative examination was conducted to assess the impact of oxygen concentration on the thermogravimetric curves of sludge particles and the temperature distribution within the reaction zone. The numerical inversion results closely match the experimental outcomes, with a maximum relative error of 7.9% and an average relative error of 6.07%. During the drying phase of sludge particles, the particle weight exhibited a slight reduction as the reaction time increased. The effect of oxygen concentration on the weight loss curve was found to be negligible. In the volatile ignition and combustion phase, the sludge particles experienced the most rapid weight loss. At this stage, the influence of oxygen concentration on the weight loss curve was particularly pronounced. An increase in oxygen concentration was found to substantially enhance the combustion rate of the sludge. The surface temperature of sludge particles experiences a modest increase in response to higher oxygen concentrations. Meanwhile, the maximum temperature within the gas phase reaction zone of tube furnace exhibits a slight downward trend as oxygen concentration rises. In the carbon combustion stage, the weight loss curve of the sludge declines as the oxygen concentration increases.