Process for treating sewage sludge at relatively low temperatures below 165.degree. C. under pressure. The sludge is heat treated in a reactor in which it is brought into close, uniform contact with air with the discharge of air bubbles from the reactor effectively prevented. The liquor separated from the treated sludge is treated by two steps of the activated sludge process. The malodorous gas produced during the treatment of sludge is also deodorized or incinerated. A fully closed treatment process is provided which does not cause any secondary pollution problem.