Hydrothermal treatment (HT) is an emerging technique for sustainable sewage sludge management and resource recovery. Many sludges are rich in iron (Fe) due to the common addition of Fe salts in water resource recovery facilities. To develop guidance for reaction conditions targeting nutrient recovery, this study systematically investigated the influence of HT temperature, treatment time, and sludge source on the dynamic speciation evolution of phosphorus (P) and nitrogen (N) during HT of Fe-rich sewage sludge. Complementary chemical extraction and X-ray spectroscopy analyses were conducted to characterize the treatment products. For the sludge mixture (a blend of primary and waste activated sludges), P speciation did not change significantly within 4.5 h at 125 °C HT, while soluble and labile P was converted into insoluble P over time at 175 and 225 °C HT. Strengite (FePO4·2H2O) preferentially formed in the hydrochars with increasing treatment temperature and/or time, whereas 125 °C HT within 1.5 h favored the formation of vivianite (Fe3(PO4)2·8H2O). Organic P was completely decomposed into orthophosphate when the HT temperature reached up to 175 °C. Pyrrole-N was enriched in the hydrochars. Similar reaction pathways were observed during HT of anaerobically digested sludge, though some minor differences in Fe-associated P and organic P were observed. Meanwhile, HT of the two sludges released orthophosphate and ammonia into the process waters at 175 and 225 °C, which can be recovered by a sequential process involving struvite (MgNH4PO4·6H2O) precipitation and air stripping. This study provides new insights into the transformation of P and N during HT of Fe-rich sludges as well as a modular design for maximum P and N recovery from the treatment products.