Oily sludge samples generated from Tehran oil refinery (Pond 1) were evaluated for their contamination levels and an adequate remediation technique was proposed for the wastes. A simple random sampling method was used to collect the samples. The samples were analyzed to measure TPHs, PAHs and heavy metals concentrations in the sludge. Statistical analysis showed that seven samples were adequate to assess the sludge characterization with respect to TPHs analyses. The mean concentration of TPHs in the samples was measured to be 265594 ppm. A composite sample prepared from. a mix of the seven samples was used to determine the sludge's additional characteristics. The composite sample analysis showed that there were not detectable amounts of PAHs in the sludge. In addition, mean concentrations of selected heavy metals including Ni, Pb, Cd and Zn were 2700, 850, 100 and 6100 ppm respectively In order to assess the sludge contamination level, the results from the analysis were compared with soil cleanup levels. Due to a lack of national standards for soil cleanup levels in Iran, sludge pollutant concentrations were compared with standards set in developed countries to evaluate if the treatment of the sludge was required. According to the cleanup standards, the sludge was highly polluted with petroleum hydrocarbons. The results of the study indicated that incineration, biological treatment and solidification/stabilization (S/S) treatments would be the most appropriate methods for treatment of the sludges. In the case of S/S, due to high organic content of the sludge, it is recommended to use organophilic clays prior to treatment of the wastes.