The purpose of this study is the preparation of activated carbon using a suitable industrial sludge. The characterization of two types of industrial sludges showed that paper sludge was a better option over rice husk. The activated carbon produced from pyrolysis of paper mill sludge was chemically activated with various activating agents like zinc chloride, potassium hydroxide and potassium chloride. A systematic investigation of the effect of impregnation ratio, activation temperature and activation time on the properties of the activated carbon was done. The chemically activated carbons were characterized by measuring iodine and yield percentage. The activated carbon prepared from paper mill sludge in this study had maximum iodine of 764.80 mg/g with ZnCl2 as the activating agent. The FT-IR analysis depicts the presence of a variety of functional groups. The XRD analysis reveals that the produced activated carbon has low content of inorganic constituents compared with the precursor.