Paper-sludge/phenolic composites were fabricated using a novolac-type phenolic resin and paper sludge. A phosphate flame retardant containing halogen (tris 2-chloroethyl phosphate) and inorganic flame retardant(aluminum trihydroxide) were introduced into neat phenolics and paper-sludge/phenolic composite in order to improve their flame retardancy. In addition, magnesium hydroxide and halogenated flame retardant were added into the paper-sludge/phenolic composite. The flame retardancies were estimated with the UL 94 test. To study the flame retardant mechanism, thermal analysis of the phenolics and the paper-sludge/phenolic composites were carried out using a thermogravimetric analyzer and a differential scanning calorimeter. The phosphated flame retardant and inorganic flame retardant both showed the flame retardant effect on the phenolics. However, the flame retardancy of the paper-sludge/phenolic composite was enhanced only by phosphated and halogenated flame retardants. This result is attributed to the fact that the flame retardancies of the phenolics and paper-sludge/phenolic composite depend on their heat capacities and decomposition behaviors.