Sludge-based beads were developed to treat REEs from wastewater. Hydrochloric acid and Fenton reagents were employed as pretreatment procedures to enhance the surface area and adsorption yield. Following this, sludge-based alginate beads were prepared by using HCl treated (HT) and Fenton treated (FT) sludge materials. The prepared beads were then investigated for the recovery of REEs. The batch adsorption studies revealed that the FT sludge beads performed better in comparison to the HT sludge beads. Among REEs, the HT- and FT-sludge beads demonstrated higher affinity towards Sm³⁺ ions, displaying the maximum adsorption capacities of 2.83 mg/g and 4.16 mg/g, respectively, in a multi-component system (C o = 25 ppm of each REE; pH = 5, t = 24 h and dosage = 5 g/L). In conclusion, the results from this work showed that the prepared sludge-based alginate beads can be used for REEs recovery from diluted waste streams and the tested sludge treatment options were also found effective in converting the waste to resource i.e., sludge to adsorbent for REEs recovery.