An inside of an incinerator body into which sludge is fed is divided into a lower portion, a portion above the lower portion, and a top portion in a height direction. The lower portion serves as a pyrolysis zone for supplying fluidizing air having an air ratio of 1.1 or less together with fuel to thermally decompose the sludge while fluidizing the sludge. The portion above the lower portion serves as an over bed combustion zone for supplying only combustion air having an air ratio of 0.1 to 0.3 to form a local high temperature place to decompose N2O. The top portion serves as a perfect combustion zone for perfectly combusting unburned contents. The quantity of N2O generated during sludge incineration can be drastically reduced while maintaining the use quantity of auxiliary fuel at the same level as that of a conventional incineration method.