Effective sludge management is increasingly critical for pulp and paper mills due to high landfill costs and complex regulatory frameworks for options such as sludge landspreading and composting. Sludge dewatering challenges are exacerbated at many mills due to improved in-plant fiber recovery coupled with increased production of secondary sludge, leading to a mixed sludge with a high proportion of biological matter that is difficult to dewater. Various drying technologies have emerged to address this challenge of sludge management, whose objective is to increase the dryness of mixed sludge to above critical levels (%42% dryness) for efficient and economic combustion in the boiler for steam generation. The advantages and disadvantages of these technologies are reviewed in this article, and it is found that many have significant technical uncertainties and/or questionable economics. A biodrying process, enhanced by biological heat generation under forced aeration, is introduced that has significant promise. A techno-economic analysis of the batch biodrying process at a case study mill showed an annual operating cost savings of about $2 million, including the elimination of landfilling practices and supplemental fuel requirements in the boiler. It was shown that if a biodrying residence time of less than 4 days can be achieved, payback periods of 2 years or less can result in many mills. The potential for the development of a continuous biodrying reactor and the fundamentals of its mathematical modeling are thus presented. Compared to the batch reactor configuration, it is expected that the continuous process would result in improved process flexibility and controllability, lower investment and operating costs due to shorter residence times, and an improved potential to fit into the crowed pulp and paper mill site.