A process for producing hydrocarbons from biological sludge, wherein the sludge is treated at a temperature of from 300.degree. to 600.degree. C. and at a pressure of from 100 to 500 bar to cause cracking of the organic compounds present in the sludge, the sludge is simultaneously or immediately thereafter hydrogenated with hydrogen under the same pressure and temperature conditions in the presence of a catalyst, and thereafter the resulting gas phase is separated into its components by stepwise reduction of pressure and/or temperature; thereby disposing of the biological sludge without environmental damage and with the simultaneous recovery of hydrocarbons.