Municipal sewage sludge was immobilized with a modified alginate gel entrapment method, and the immobilized cells were used to produce hydrogen gas in a three-phase fluidized bed. The hydrogen-producing fluidized beds were operated at different liquid velocity (U-0) and hydraulic retention time (HRT). The results show that in response to operating liquid velocities, the fluidized-bed system had three flow regimes, namely, plug flow, slug flow, and free bubbling. Pressure fluctuation analysis was used to analyze the hydrodynamic properties in this three-phase fluidized bed when it was under a steady-state production of biogas. With a steady-state biogas production rate (U-g) of 0.196 mL/s/L, a transition state occurred at a liquid velocity (U-0) of 0.85 cm/s. As U-0 < 0.85 cm/s, the system was basically a nonhomogeneous fluidized bed, whereas the bed became homogeneous when U-0 was higher than 0.85 cm/s. The fluidized bed can be stably carried out at high loading rates (HRT as low as 2 h). Hydrogen fermentation results show that the maximal hydrogen production rate was 0.93 L/h/L and the best yield (Y-H2/sucrose) was 2.67 mol H-2/mol sucrose.