The formation of municipal sewage sludge, a significant waste product of conventional municipal wastewater treatment processes, has surged dramatically due to increasing urbanization and industrialization. As a result, the safe recycling and resource recovery of municipal sewage sludge has become a pressing environmental challenge. On the other hand, incineration has long been regarded as an effective method for the secure disposal of this sludge, despite its high operational costs and challenges related to the emission of pollutants. Sludge can also be co-incinerated in facilities such as cement kilns, coal-fired power plants, and municipal solid waste (MSW) incinerators. This co-combustion approach is advantageous because it reduces the need for additional flue gas treatment systems and incineration equipment, and in some cases, it can even be more environmentally sustainable. The incineration process itself can be further optimized to reduce nitrogen oxide emissions through methods such as staged air combustion and low-oxygen dilution combustion. Additionally, the removal of sulfur can be enhanced by the use of calcium-based additives, while the volatilization of toxic metals and the formation of harmful components, such as polychlorinated dibenzo-p-dioxins and polychlorinated dibenzofurans, is influenced by chlorine-containing compounds. This chapter will provide an in-depth examination of these issues, with particular emphasis on the ecotoxicological risks associated with pollutants in sewage sludge. It will systematically review and analyze the latest research on pyrolysis of municipal sewage sludge and the strategies for managing its associated pollution. Furthermore, the chapter will explore potential treatment technologies to facilitate the long-term reuse of sewage sludge within a circular economy framework, as well as the environmental risks related to the utilization of sludge to soils.