The direct hydrolysis of municipal sludge for the production of oil and gas has become a key research focus, despite the application of hydrolysis residues presenting a challenge. In this study, municipal sludge was directly hydrolyzed in a high-pressure reaction kettle and the hydrolysis residue byproduct was used as a carrier to prepare a composite phase change heat storage material (CPCM), utilizing vacuum impregnation for sodium acetate trihydrate (SAT) loading. The results of Brunauer-Emmett-Teller (BET) and particle size analyses showed that the residue obtained by the hydrolysis of sludge and sawdust with a dry basis ratio of 4:1 had a higher pore volume and a uniform particle size. The adsorption capacity of the hydrolysis residue to SAT reached 600 wt %; the phase change temperature of the CPCM was 56.9 °C, and its latent heat reached 217.9 kJ/kg. The CPCM remained stable during 150 cycles of the melting-solidification process in a water bath and maintained excellent phase change characteristics. The hydrolysis residue can effectively improve the undercooling and phase separation of SAT without other additives.