Hydrothermal carbonization (HTC) emerged as an effective technology for the treatment of various types of wet biomass and organic residues, including sewage sludge, offering the potential for sludge reduction and resource recovery. HTC pretreatment impact on downstream sludge fermentation is investigated. Results obtained at optimal conditions for HTC pretreatment (170 °C for 30 min) indicated that soluble carbon was significantly increased in the liquid fraction, enhancing feedstock availability for fermentation. Semi-continuous fermentation of HTC-treated sludge resulted in a stable process in which a mixed microbial community produced volatile fatty acids (VFAs) with longer chain acids content, acidification yield of 0.59 ± 0.05 g COD-VFA g−1 CODin and volumetric productivity of 1.6 ± 0.5 g COD-VFA L−1 d−1. Biomethane Potential tests evidenced high values for hydrochar. Overall, the HTC pretreatment enables improved conversion efficiencies, in the view of valorizing the liquid for VFA synthesis and the hydrochar for biomethane production.