The invention relates to an organic compound fertilizer produced by using sludge with a water content of 80% and a production method. The production method is characterized by comprising the steps ofadopting the sludge with the water content of 80%, coal ash, agricultural waste, quick lime, ferrous sulfate, magnesium sulfate, polyacrylamide and chlorine dioxide for even mixing, using a belt conveyor for transporting a mixture to a sealed high-temperature fermentation machine, elevating temperature in the fermentation machine to 100 DEG C through oil-electric heat conduction, maintaining an outage for 2 hours, maintaining temperature at 60 DEG C, adding high-temperature-loving active compound bacteria for fermentation, adjusting a stirring system of the fermentation machine to turn on an intermittent stirring function, and enabling fermentation time of the sludge in the fermentation machine to be 12 hours to effectively kill harmful microorganisms, eggs, weed seeds and pathogenic bacteria in the sludge; and ageing, crushing and screening a fermented cooked material to produce powder, and using an automatic electronic weighing and packaging machine for packaging the powder to produce an organic compound fertilizer product. Therefore, the problem of treating the sludge with the water content of 80% is solved, resource utilization of the sludge is achieved, and pollution to the natural environment is reduced.