The invention discloses a harmless treatment method of oil sludge, comprising the steps of: (1) adding a dispersing agent in the oil sludge and standing in a separator to layer; (2) separating an upper light oil layer; (3) separating a middle oil sludge layer, adding a coagulant to react and then collecting a reacted product which is oil putty; (4) adding titanium dioxide, calcium carbonate, polyurethane acrylic acid, phosphoric acid and a swelling agent in a lower water layer to obtain a water-based paint; and (5) collecting, grinding and filtering the obtained sediments after the layering to obtain fine iron oxide sediments. The invention also discloses a device used in the method. Through the harmless treatment method and device of oil sludge in the invention, the harmful components inthe oil sludge can be separated; and the organic compounds included in the separated water and oil sludge are sufficiently utilized and further converted into high-quality raw materials through activated reaction. By means of the method in the invention, the components of the oil sludge can be completely utilized, thereby achieving the requirements of zero release, harmless treatment and recycling treatment of the three wastes.