Thermal drying is an effective sludge treatment method for dealing with large volumes of sludge. Microwave (MW) technology has been proposed as an effective and efficient technology for sludge drying. The physical-chemical properties of the sludge depend both on the origin of the sludge, as well as on the treatment process at which the sludge has been exposed. The physical-chemical properties of the sludge affect the performance and the subsequent valorisation and management of the sludge. This study evaluated the effect of certain physical-chemical properties of the sludge (moisture content, organic content, calorific value, porosity, hydrophobicity, and water-sludge molecular interaction, among others) on the MW sludge drying and energy performance. Four different types of sludge were evaluated collected from municipal wastewater treatment plants and septic tanks. The performance of the MW system was assessed by evaluating the sludge drying rates, exposure times, energy efficiencies and power input consumed by the MW system and linking the MW drying performance to the sludge physical-chemical properties. The results confirmed that MW drying substantially extends the constant drying period associated with unbound water evaporation, irrespective of the sludge sample evaluated. However, the duration and intensity were determined to depend on the dielectric properties of the sludge, particularly on the distribution of bound and free water. Sludge samples with a higher amount of free and loosely bound water absorbed and converted MW energy into heat more efficiently than sludge samples with a lower amount of free water. As a result, the sludge drying rates increased and the constant drying rate period prolonged; hence, leading to an increase in MW drying energy efficiency. The availability of free and loosely bound water molecules was favoured when hydrophobic compounds, e.g., oils and fats, were present in the sludge.