The invention discloses a municipal sludge reduction method. The method includes the steps of: 1) introducing municipal sludge into a sludge concentration tank for concentration, and letting the supernatant flow back to the front end of a sewage treatment plant; 2) introducing the concentrated municipal sludge into a biological conditioning tank I, adding ferrous salt and sulfur powder, conductingstirring and aeration, and performing first-stage conditioning; 3) introducing the municipal sludge subjected to the first-stage conditioning into a biological conditioning tank II, replenishing ferrous salt and sulfur powder, and conducting stirring and second-stage conditioning; 4) introducing the municipal sludge subjected to the second-stage conditioning into a modification tank, adding acid,and performing modification treatment; and 5) introducing the modified municipal sludge into a diaphragm filter, adding an external magnetic field, and performing filter pressing to obtain a filter cake and filtrate, subjecting the filter cake to concentrated treatment, and returning the filtrate to the sludge concentration tank. The municipal sludge reduction method provided by the invention hasthe advantages of small reagent dosage, low energy consumption, simple treatment process, good sludge reduction effect and the like, and can reduce the water content of sludge to 50% or below.