The invention discloses a system and a method for treating iron-contained oil sludge. The system comprises a dry distillation device, a ball pressing device, a drying device, a rotary hearth furnace and a gas melting separation furnace, wherein the dry distillation device has an iron-contained oil sludge inlet, an oil-gas mixture outlet and a solid carbon outlet; the ball pressing device has a solid carbon inlet, a coal powder inlet, a binding agent inlet, an iron ore powder inlet and a mixed pellet outlet; the drying device has a mixed pellet inlet and a dried pellet outlet; the rotary hearth furnace has a dried pellet inlet, a reduction smoke outlet and a solid reduction product outlet; burners are arranged in the rotary hearth furnace; and the gas melting separation furnace has a solid reduction product inlet, a melting separation smoke outlet, a molten iron outlet and a slag outlet. The system not only can recover oil products with high additional value in the iron-contained oil sludge, but also can recover metal elements in the iron-contained oil sludge, so that the resourceful treatment of the iron-contained oil sludge is realized, and the coking phenomenon cannot generate in the treatment process.