Sludge is thick, damp, almost sticky stuff. If your friend dares you to climb through an old sewer pipe, you might want to check first to see if it's full of sludge.
Sludge is often used to talk about the byproduct of a process like sewage treatment or oil refining, but you can use it for any viscous goop. Sludge floating in your fish tank is a sign that you should clean the water, and sludge inside a car's engine can affect the way the car runs. Sludge is a bit of a mystery — it may come from the Middle English slutch, "mud," or might be related to slush.