Sludge drying is a crucial part of the sludge treatment and disposal processes, while thermal drying has been a popular choice. In this work, the sludge thermal drying process is numerically simulated using a coupled computational fluid dynamics−discrete element method (CFD-DEM) approach. The CFD-DEM model describes the flow and heat transfer in the gas−solid system, while a mass transfer approach is embedded to describe the variation in the moisture content. First, a suitable numerical model to describe the sludge water removal process is developed based on physical experimental data. Quantitative comparisons with experimental data validate the predictive capability of the numerical model for the continuum gas flow field, as well as the sludge drying process. Then, five key parameters including velocity, temperature and humidity of the heat source, particle size, and sludge pile thickness are discussed to obtain the basic laws affecting the sludge drying process. The pilot dryer is subsequently simulated, and a simplified solution for industrial-scale simulation is proposed. All of the above work is supported by abundant experimental data to demonstrate the capability of the CFD-DEM model. Finally, based on more CFD-DEM simulation, the optimal operating conditions are determined with flexibility recommendations for dryer design summarized. This work contributes to an indepth understanding of sludge drying characteristics and also has important practical and theoretical engineering value.