The invention relates to a reduction treatment method and device for oily sludge. The reduction treatment method for the oily sludge comprises the steps that firstly, fluidization and pretreatment are performed on a sludge system, wherein sludge materials are conveyed to a feeding hopper via a screw conveyor, a cutting type mechanical stirrer is started, circulating water is mixed back, the fluidized sludge materials flow towards a fluidization and pretreatment tank, and the stirred and aerated fluidized sludge enters a demulsification tank through a mechanical grille with grille gaps being not larger than 15 mm; secondly, conditioning and demulsification are performed on the sludge system, wherein a cleaning agent is added into a tank inlet through a chemical feed pump, a coil heating and temperature control system is powered on, a stirrer is started, and therefore homogenization conditioning and demulsification desorption are performed on the sludge system; the sludge system is conveyed to a secondary inverted-cone-shaped conditioning and demulsification treatment tank for treatment after being subjected to primary conditioning and demulsification, the treated sludge system converges into the inverted-cone-shaped part, and sludge discharge is performed through a perforated pipe; thirdly, ultrasonic destabilization of the sludge system is performed; fourthly, mechanical centrifugation is performed on the sludge system. According to the reduction treatment method and device for the oily sludge, the problem of volume and quantity reduction of recovered and discharged sludge during dirty oil separation in an oily sludge system is solved scientifically and effectively.