Black-odorous sediment pollution in urban have received widespread attention, especially pollution caused by acidified volatile sulfide (AVS), phosphorus and heavy metals. Fe3O4 was loaded onto the biochar (BC) by coprecipitate method to synthesize Fe3O4@BC composites, which were mixed with calcium peroxide (CP) to sediment pollution treatment. In this study, the removal of AVS was analyzed from three aspects: firstly, AVS was oxidized with oxygen produced by CP. And then, Fe2+ could activate H2O2 produced by CP to generate hydroxyl radicals which have strong oxidation property to oxidize AVS. Finally, AVS was removed by bacterial denitrification. The results showed that the AVS removal rate could reach 71% compared with the blank group on the 25th day. With the addition of CP and Fe3O4@BC, the content of overlying water remained at 0.1 mg/L, which was due to the conversion of NH4Cl-P and Fe/Al-P in sediments into Ca-P to inhibit the release of phosphorus. At the same time, the acid extractable state and the reducible state of Cr in the sediment also decreased to 0.58% and 0.97%, which inhibited the release and migration of the heavy metal Cr. In addition, the results of high-throughput genetic test showed that the CP+Fe3O4@BC group had a great increase in the total number of microorganisms compared to other groups. The abundance of Sulfurovum increased while that of sulphate-Reducing Bacteria (SRBs) was inhibited. Moreover, an abundance of denitrifying bacteria (Dechlorominas, Acinetobacter and Flavobacterium) was increased. This study showed that the combined application of Fe3O4@BC composites and CP had a remarkable effect on the urban sediment treatment, which provided a new way to remove sediment pollution.