Fe based chemically enhanced primary sedimentation (CEPS) is an effective method of capturing the colloidal particles and inorganic phosphorous (P) from wastewater but also produces Fe-CEPS sludge. Anaerobic digestion is recommended to treat the sludge for energy and phosphorus recovery. However, the aggregated sludge flocs caused by the coagulation limited sludge hydrolysis and P release during anaerobic digestion process. In this study, cation exchange resin (CER) was employed during anaerobic digestion of Fe-CEPS sludge with aims of prompting P release and carbon recovery. CER addition effectively dispersed the sludge flocs. However, the greater dispersion of sludge flocs could not translate to higher sludge hydrolysis. The maximum hydrolysis and acidification achieved at lower CER dosage of 0.5 g CER/g TS. It was observed that the extents of sludge hydrolysis and acidification had a strongly negative correlation with the organic binding iron (OBI) concentration. The presence of CER during anaerobic digestion favored Fe(III) reduction to Fe(II), and then further induced iron phase transformation, leading to the OBI formation from the released organic matters. Meanwhile, higher CER dosage resulted in higher P release efficiency and the maximum efficiency at 4 g CER/g TS was four times than that of the control. The reduction of BD-P, NaOH-P and HCl-P in solid phase contributed most P release into the supernatant. A new two-stage treatment process was further developed to immigrate the OBI formation and improve the carbon recovery efficiency. Through this process, approximately 45% of P was released, and 63% of carbon was recovered as methane from Fe-CEPS sludge via CER pretreatment.