This study was carried out to investigate the economic and environmentally friendly process of drying sludge by combining a mechanical dewatering filter press and thermal dryer. The dryer for 40 kg/hr of dewatered sludge consisted of a main dryer, a heat exchanger, a pre-dryer, and supplementary equipment. During the dewatering process, 100 kg of sludge with 80.11% water content was diluted and mixed with 400 kg of water and ferric chloride solution was added as a sludge conditioner. The average water content of dewatered sludge cake was 60.9% and the energy consumption rate (ECR) for removing water was 226.9 kcal/kg-H2O. Hot flue gas generated from the main dryer was utilized as heating air for the pre-dryer in the heat exchanger. When 36 kg/hr of dewatered sludge cake was dried, the ECR was 1,009 kcal/kg-H2O with 3.96% water content. The combined operation of the dewatering and the thermal drying processes showed that the ECR was reduced sharply to 521 kcal/kg-H2O. The high humidity gas generated from each drying unit in the main dryer was recirculated to the odor decomposition chamber in the main dryer to destroy odor components at a high temperature. The odor concentration of humid gas generated by the pre-dryer was very low due to the relatively low operating temperature.