Sludge produced from coal to oil process contains larger content of tar, phenols, ammonia components, and ashes. It cannot be treated by using traditional disposal methods as landfill or incineration. A promising solution is to blend sludge with coal for preparation of sludge/coal-water slurries. The new slurry fuels could be used in commercial gasifiers for syngas generation. In this process, the first goal is to form a stable slurry. In the research project, the addition of sludge on the stability of coal-water slurries was investigated. Results show that the addition of sludge can improve the static stability for slurries prepared by lean coal, coking coal, and lignite. The effect on stability of coking coal-water slurry is the most significant. The proportion of sludge to lean coal added in the slurry can be maintained at 10% to 15%.