Reactive magnesium oxide (MgO) and ground granulated blast furnace slag (GGBS) are cementitious materials introduced into sludge solidification, which not only reutilizes solid waste but also reduces cement consumption. Through the carbonation of reactive MgO and GGBS, the strength of the solidified sludge is further improved and CO2 is stably sequestrated in carbonate minerals. This paper investigates the strength and microstructural development and CO2 uptake of solidified sludge with varying water content, binder content, and ratio of MgO to GGBS. According to unconfined compressive strength (UCS) tests, when the binder content is 20% and the ratio of reactive MgO to GGBS is 2 & ratio;8, the strength of carbonated samples increases the most, which is six times that of the sample without reactive MgO. With binder content, the CO2 uptake of sample increases up to 2.1 g. Scanning electron microscope (SEM), X-ray diffractometer (XRD), and thermogravimetry-differential thermogravimetry analysis (TG-DTG) tests were conducted to systematically elucidate the micromechanism of carbonation of sludge solidified by reactive MgO and GGBS. Various carbonation and hydration products enhance the soil strength through filling pores and integrating fine particles into bulk aggregates. As the ratio of reactive MgO to GGBS increases, dypingite and hydromagnesite were converted into nesquehonite with better morphological integrity, and thus strengthens the soil skeleton. Diverse calcium carbonate polymorphs from carbonated GGBS also promote sludge strength growth and CO2 sequestration. Test results indicate that the addition of reactive MgO further improves the hydration and carbonation properties of GGBS, so the CO2 uptake grows with the ratio of reactive MgO to GGBS. The synergistic effect of reactive MgO and GGBS increases the carbonation performance of the mixed binder, so likewise the compressive strength.