Different temperatures in the range of 180–300 °C were applied to evaluate the effect of hydrothermal carbonization (HTC) temperature on hydrochar fuel characteristics and thermal behavior. The hydrochar produced at 210 °C had the maximum heating value (9763 kJ/kg) with the highest energetic recovery efficiency (90.12%). Therefore, 210 °C could be the optimum temperature for HTC of paper sludge. With raising the temperature, noticeable decreases in nitrogen and sulfur contents with lower oxygen/carbon and hydrogen/carbon atomic ratios were observed. In addition, the slagging and fouling problems were dramatically mitigated due to efficiently remove of major ash forming contents, especially for chlorine, sodium and potassium. Finally, thermal gravimetric analysis showed that HTC temperature had a significant impact on combustion behavior and activation energy of hydrochars. The first combustion decomposition peak of hydrochars treated at 180, 210 and 240 °C, were much higher that other samples, leading to a better combustion performance.