Based on the sludge mass transfer flux model, this paper conducts a simulation study on the drying characteristics of sludge under low-temperature environment and compares it with the previous experimental results. It is found that when the sludge moisture content is low, the change of its drying curve is basically consistent with the experimental results, but there is a large error when the sludge moisture content is 0.4–0.6. In order to better simulate sludge drying characteristics, a model of cracking and shrinkage coefficients based on sludge moisture content is proposed, and the effective diffusion coefficient and mass transfer coefficient are modified. The maximum error between simulation and experiment is reduced to 23.78%. Based on this model, the sludge drying mechanism was studied. It was found that heat transfer and diffusion played a major role in the initial stage of sludge drying, and diffusion played a major role in sludge drying 30 min later.