The invention relates to a composite fungicide for treating sludge and a sludge treatment method. The composite fungicide is prepared from the following components in parts by weight: 3 to 8 parts of purple sulfur bacteria, 3 to 8 parts of green sulfur bacteria, 3 to 8 parts of rhodopseudomonas, 3 to 8 parts of rhodopseudomonas capsulata, 3 to 8 parts of rhodococcus rhodochrous, 3 to 8 parts of white-rot fungi, 3 to 8 parts of phosphorus-accumulating bacteria, 3 to 8 parts of anaerobic ammonium oxidation bacteria, 3 to 8 parts of lactobacillus plantarum, 3 to 8 parts of streptomycete, 3 to 8 parts of candida utilis, as well as saccharomyces cerevisiae, lactobacillus lactis, lactobacillus acidophilus, aspergillus niger, aspergillus oryzae, bacillus subtilis and bacillus licheniformis.