Activated sludge process is widely used in treating a wide variety of wastewater, but the by-product is the large amount of excess sludge. To treat the excess sludge properly could spend 25%-60% of the total cost of wastewater treatment, while improperly treating the sludge could cause serious secondary pollution. Therefore, the reduction of excess sludge is becoming a rising challenge. Using thermophiles to degrade excess sludge is a way easy in operation and inexpensive in maintenance, being a promising method in application. This paper reviewed the recent progress in the researches of sludge-degrading thermophiles, their working mechanisms, and the enzymes from thermophiles, such as thermophilic proteolytic enzymes and thermophilic lipases which play an important role in the degradation of sludge. The factors affecting the degradation of sludge by thermophiles were summarized, and the perspectives for the further research on the application of thermophiles in digesting sludge were discussed.