The invention relates to the technical field of environment engineering, in particular to a municipal sludge treatment method. A drying furnace and a pyrolysis carbonization furnace are used for carrying out dehydration treatment and pyrolysis carbonization treatment on municipal sludge; jacket type rotary furnaces are adopted as the drying furnace and the pyrolysis carbonization furnace; the drying furnace is supplied with heat by means of auxiliary heating flue gas produced by a drying auxiliary combustion furnace and pyrolysis furnace jacket flue gas led out from a heating jacket of the pyrolysis carbonization furnace; the pyrolysis carbonization furnace is supplied with heat by means of high temperature heating flue gas generated by a mixed combustion furnace. The pyrolysis carbonization furnace is provided with a pyrolysis gas discharge hole, and the pyrolysis gas discharge hole is used for sending pyrolysis gas, produced in a furnace chamber of the pyrolysis carbonization furnace, to the mixed combustion furnace for burning, so that the high temperature heating flue gas can be generated. The municipal sludge treatment method utilizes the pyrolysis gas generated in a sludge carbonization process and recycles the three components, i.e., solid, liquid and gas in a classified way. Furthermore, the temperature difference of the carbonization furnace and the drying furnace is also utilized, and the flue gas in the jacket of the carbonization furnace is used for heating the drying furnace, so that the utilization rate of energy is further increased.