Hydrothermal carbonization (HTC) is an effective means of energizing high-water-content biomass that can be used to convert sewage sludge (SS) into hydrochar and reduce nitrogen content. To further reduce the emission of NOx during the combustion of hydrochar and seek proper disposal method of liquid product, the mechanism of nitrogen conversion was studied in the range of 180-320 °C and 30-90 min. At 180-220 °C, 42.15-52.91% of the nitrogen in SS was transferred to liquid by hydrolysis of proteins and inorganic salts. At 240-280 °C, the nitrogen in hydrochar was mainly in the form of heterocyclic -N (quaternary-N, pyrrole-N, and pyridine-N). The concentration of NH4+-N increased from 6.82 mg/L (180 °C) to 26.58 mg/L (280 °C) due to the enhancement of the deamination reaction. At 300-320 °C, pyrrole-N (from 15.92% to 9.38%) and pyridine-N (from 5.52% to 3.73%) in the hydrochar were converted to the more stable quaternary-N (from 0.31% to 4.28%). Meanwhile, the NH4+-N and amino-N in the liquid decomposed into NH3. Prolonging the carbonization time promoted the hydrolysis of proteins, the conversion of heterocyclic -N, and the production of NH3. Under optimal reaction conditions (280 °C and 60 min), the nitrogen in the SS is converted to stable forms and the energy balance meets the requirements of circular-economy. The results show that temperature determines the nitrogen form and the carbonization time affects the nitrogen distribution. So HTC has the potential to reduce NOx emissions from SS energy utilization processes.