The invention discloses a harmless treatment system and method for oily sludge, and relates to the technical field of sludge treatment .The harmless treatment system for the oily sludge is composed of a mechanical dewatering device, a pretreating device, a gas treating unit, a water treating unit, a drying device, a granulating device, a combustion furnace and a brick making device .The harmless treatment method for the oily sludge is wide in application range, low energy consumption and cost and free of secondary pollution, and wastewater, waste residues and waste gas which are generated in the oily sludge treating process are thoroughly removed through the processes of pretreating, drying, combusting, waste residue treating, waste gas treating and wastewater treating; meanwhile, heat, the waste residues and purified water which are generated in the technological process are recycled, and therefore the oily sludge treating cost is greatly reduced; in addition, emission of the treated wastewater, waste residue and waste gas meets the national environmental protection requirements, and then harmless treatment for the oily sludge is achieved.