Because of their superior environmental performance, mycelium-based composites (MBCs) offer a promising sustainable lightweight alternative material. MBCs are frequently prepared using agricultural by-products as substrates. However, because agricultural by-products are seasonal, their output is limited by a constant need for substrates. In order to examine the feasibility of creating MBCs using sewage sludge (SS) in place of bagasse, this study used SS and bagasse as nutrient substrates and cultivated MBCs on ready-made mycelium (Pleurotus ostreatus). The physico-mechanical properties, morphological properties, and thermal stability analysis were tested and analyzed. The results showed that the bagasse MBCs’ colonization appearance took precedernce over that of the SS MBCs at early stagy. However, both the bagasse and SS promoted fungal growth to create a dense mycelial network on day 10. The bagasse-based MBCs were the lightest and adding SS increased the density and compressive strength of the MBCs. The volume shrinkage first decreased and then increased. The optimal ratio of mycelium to sewage sludge was 2:1, which produced an outstanding compressive strength of 690.20 KPa. The thermal conductivity of bagasse-based and SS-based MBCs were 0.12 Wm-1K-1 and 0.13 Wm-1K-1. The physico-mechanical characteristics satisfiy the requirements of lightweight backfill materials in highway. Additionally, SS improved the hyphae of MBCs, giving them a denser and stronger structure. In comparison to bagasse, it also showed better thermal stability and a higher residual mass. It is feasible to produce MBCs with SS in place of bagasse, and the biocomposite proposed in this study could be used as lightweight backfill materials that are widely needed in highway.