Urban sludge was treated by Hydrothermal carbonization (HTC). The effect of hydrothermal carbonization temperature, mixing with or without catalysts on solid products yield, heavy metal contents, turbidity and COD value was evaluated. The result showed solid products yield decreased from 92.04% to 52.65% when the temperature increased from 180 to 300°C. And the Cu, Zn, and Pb contents under exchangeable states decreased and reached discharge standard. Addition of FeCl3 or Al(OH)3 resulted in a significant increase in the exchangeable states of Zn, Pb, Cr, and Cd and decrease in their residual states. The turbidity and COD value of hydrothermal liquid decreased from 450° to 175°, and 13 to 6.8g/L, with increasing hydrothermal temperature. Comparison with HTC, solid productivity from low-temperature pyrolysis is higher. The exchangeable states of Cu, Zn, and Cr exceeded the limiting values. Our results show HTC can facilitate transforming urban sludge into no-pollution and energy-rich products.