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Anaerobic digestion of wastewater sludge (WS) has received limited attention worldwide in many wastewater treatment plants (WWTPs). This study investigated the potential of valorizing WS generated from a WWTP in Lebanon for enhanced methane production and digestate recovery. Batch experiments were conducted, and the results showed cumulative methane yields of 0.3403, 0.4179, and 0.4643 Nm3CH4 kgVS−1 for untreated WS, WS + 6% NaOH, and WS + 10% NaOH, respectively. Biochemical characterization of the sludge revealed that the alkaline pretreatment increased methane production volume and kinetics by solubilizing hemicellulose, cellulose, and lignin. The process was scaled up using continuous digesters with an HRT of 30 days and an OLR of 3.56 KgVS m−3 d−1, and it was found that alkaline treatment enhanced WS methane production by about 37% compared to the control. Moreover, the digestate was examined for its quality, and the results showed that the Germination Index (> 60%) and Escherichia coli concentration (3 CFU g−1) were within the appropriate values of international legislation on compost quality, indicating its potential for use in agriculture. Finally, a large-scale digester was designed based on a case study, and calculations showed that it could recover up to 18% of the WWTP's annual electrical consumption. The study's outcomes suggest that the anaerobic digestion of WS can be an effective strategy for bioenergy and nutrient recovery in WWTPs and could have broader applications in other countries facing similar challenges. [ABSTRACT FROM AUTHOR]