Paper mill sludge (PMS) is a paper industry waste but can be a potential feedstock for cellulosic sugar production. In this study, washing, autoclaving, and surfactants were investigated for PMS pretreatment before enzymatic hydrolysis to produce cellulosic sugars. It was demonstrated that washing and autoclaving had a limited impact on improving the enzymatic hydrolysis of PMS but washing reduced the ash content, resulting in less acid being used in neutralization. Adding nonionic surfactants of Triton X-100, Tween 80, and PEG 8000 improved the conversion of PMS, and the highest rates were 56.3% and 55.4%, achieved by adding 1% Triton X-100 and 5% PEG 8000, respectively. The lowest conversion rates were produced by 1% and 5% Tween 80, probably because it had a hydrophobic alkyl chain. After the optimization of the enzyme and PMS concentrations in hydrolysis via supplementation with PEG 8000, the highest PMS conversion of 74.7% was achieved by 10% PMS and 3% enzymes. With the addition of PEG 8000, the conversion of PMS was reduced at high concentrations of enzyme and PMS compared with that of the non-PEG control, which was more significant at the later stage of hydrolysis. We proposed that the combined negative effects of end products and surfactants were more significant on hydrolysis than the effects of end products alone.