To address the grand challenge of increasing the sustainability of wastewater treatment plants, hydrothermal carbonization was studied as a nutrient recovery platform, transforming sludge into a valuable hydrochar. Carbonization was achieved at different temperatures (200–300 °C) and durations (30–120 min). The highest mass recovery (73%) was observed in the lowest temperature, while the lowest (49%) was obsereved at the highest temperature. Under all reaction conditions, phosphorus recovery values exceeded 80%, with the dominated fraction of inorganic-P in the hydrochar being HCl-extractable. Although HCl-extractable P is considered a moderately labile P fraction, P phytoavailability assays indicate that sewage sludge hydrochar is an excellent source for P, surpassing soluble P, likely due to its slow-release nature. We postulate that polyphosphates constitute a significant portion of this P pool. Overall, we emphasize the benefits of using HTC as a circular economy approach to convert sludge into a valuable hydrochar.