This paper gives an overview of the possibilities of sludge drying and its use in energy production. Activated sludge from a pulp and paper integrate has been taken as an example. A typical waste water purification system in a pulp and paper mill consists of mechanical and biological waste water treatment. The sludges resulting from these processes have to be disposed of. One possibility is to incinerate them with solid fuel in the power plant of the mill. The sludges have to be dried before the incineration. The sludge from biological treatment, activated sludge, consists mainly of microorganisms and its mechanical drying is difficult to handle. Thermal drying utilizing the secondary energies of the mill may be an energy-economically competitive method for drying the sludge. Partial vacuum evaporation may be a suitable solution for using the secondary energies at relatively low temperatures. The results show that it is possible to find a solution for sludge drying and that sludge can, not only be destroyed by incineration, but also be used as a fuel in the mill’s power plant.