Hydrothermal Liquefaction (HTL) could be a promising and better alternative to other techniques for energy recovery from municipal sewage sludge (MSS). However, the nutrients (i.e., N, and P) recovery potential from the byproducts, generated in the HTL of MSS, needs to be studied so that a comprehensive sludge management practice could be adopted. In this study, HTL process temperature (275-400 °C), and reaction time (30-120 min) were first investigated for biocrude yield and release of the nutrients to the aqueous phase liquid (APL) and biochar. The maximum energy recovery (i.e., 59%) and maximum energy return on investment (i.e., 3.5) were obtained at 350 °C and 60 min of holding time. With the increase in HTL reaction time, the concentration of nitrogen in the APL increased (5.1 to 6.8 mg/L) while the concentration of phosphorus decreased (0.89 to 0.22 mg/L); the opposite was observed for the biochar. The nutrient recycling efficiency from the APL using microalgae was found to be strain-specific; nitrogen recycling efficiency by Picochlorum sp. and Chlorella sp. were 95.4 and 58.6%, respectively. The APL, derived from 1 kg MSS, could potentially produce 0.49 kg microalgal biomass. Since the concentrations of various metals in the biochar samples were substantially lower compared to their concentrations in raw MSS, the application of biochar as a soil conditioner could be very promising. Overall, net positive energy could be recovered from MSS using the HTL process, while the nutrients in the APL could be used to cultivate specific microalgae, and biochar could be applied to enhance the soil quality.