A pilot-scale municipal sewage sludge deep-shaft aeration system was implemented in Lanzhou, Gansu Province of China. The reactor depth was 60 m with a diameter of 1.0 m and the sludge to be treated came from a wastewater plant in Lanzhou. In order to obtain the optimum operation conditions, analysis was conducted on the transformations of the volatile suspended solids (VSS), temperature, pH, oxidation-reduction potential (ORP) and pathogens in the deep-shaft reactor under different aeration conditions. Attention was paid to how operating conditions affected the removal efficiency of the VSS and the reaction temperature. As a result, higher volatile solids removal was gained at higher temperature, and the temperature could reach 50.8°C for a complete inactivation of bacteria in the first reaction zone when the deep-shaft aeration system was run for about 18 days. The sludge aeration rate was observed as 1.5 to 1.8 L/(h·L sludge) which enabled the volatile solids removal rate to reach 40.1%. The degradation of VSS occurred under a micro-oxygen environment, and the lowest ORP was found to be −256 mV in the digestive process. Not only aerobic bacteria but also anaerobic and facultative bacteria performed their functions in the reactor.