Sedimentation sludge water (SSW) from sedimentation tanks in drinking water treatment plants contains significant amounts of dissolved organic matter (DOM) and precursors of disinfection byproducts, raising increasing concerns about the safety of finished water following SSW recycling. This study explores the alterations in bulk properties and molecular characteristics of DOM in SSW treated with ultraviolet (UV)/ferrous ions (Fe2+) and peracetic acid (PAA) using fluorescence spectroscopy and Fourier transform ion cyclotron resonance mass spectrometry (FT–ICR MS). The primary reactive species, hydroxyl radicals (·OH) and acylperoxy radicals (CH3C(O)OO·) achieved degradation rates of up to 82.0%, eliminating 84.5% of total fluorescent components and reducing molecular intensity and apparent molecular count by 90.9% and 69.8%, respectively. This treatment significantly reduced the aromaticity of DOM, leading to the formation of more oxidized and stable compounds. Reaction mechanisms indicate that ·OH and CH3C(O)OO· primarily facilitate oxygen addition and dehydrogenation, while CH3C(O)OO· promotes decarboxylation through weak electron transfer processes. The treatment preferentially removes complex DOM containing nitrogen and sulfur heteroatoms, which are key precursors of disinfection byproducts. These findings enhance our understanding of DOM transformations during UV/Fe2+/PAA treatment and provide valuable insights into the safe recycling of SSW.