In municipal waterworks large amounts of waste in the form of sludge have to be discarded. This investigation focuses on the processing of ceramic floor tiles incorporated with a municipal waterworks sludge. Four floor tile formulations containing up to 10 wt. % of the municipal waterworks sludge in replacement of kaolin were prepared. The floor tile processing route consisted of dry powder granulation, uniaxial pressing, and firing between 1190 and 1250 °C using a fast-firing cycle (<60 min). The densification behavior and technological properties of the floor tile pieces as function of the sludge addition and firing temperature were determined. The development of the microstructure was followed by XRD and SEM/EDS. The results show that the replacement of kaolin with municipal waterworks sludge, in the range up to 10 wt. %, allows the production of ceramic floor tiles (group BIb and group BIIa, ISO 13006 Standard) at lower firing temperatures. These results suggest a new possibility for valorization of municipal waterworks sludge with many economical and environmental benefits.