There is provided a method of sludge treatment. The method comprises the steps of: - obtaining a sludge, preferably from a wastewater treatment plant; - dewatering the sludge to obtain dewatered sludge and sludge water; - heat-treating the dewatered sludge, optionally after dilution, which heat-treating step comprises separation into a heat-treated slurry and a second fraction, which has lower total suspended solids (TSS) than the heat-treated slurry; - subjecting the second fraction to wet oxidation to obtain a wet-oxidized fraction; - flashing the wet-oxidized fraction in at least one step to obtain at least one steam fraction and a cooled wet-oxidized fraction; - mixing sludge water from the dewatering step with the cooled wet-oxidized fraction to obtain a reject water mixture, wherein the temperature of the reject water mixture is higher than the temperature of the sludge water supplied to said mixing; and - subjecting the reject water mixture to a bacterial nitrogen removal treatment to obtain treated reject water.