Abstract: To address the issue of sludge biochar treatment and explore its impact on the growth of Phoebe bournei seedlings and soil nutrient components, a pot experiment was conducted with Phoebe bournei seedlings as the research object. Nine different dosages of sludge biochar were set up. The growth, physiological, photosynthetic, and nutrient components of Phoebe bournei seedlings as well as soil nutrient components were measured. Correlation analysis and membership function analysis were used for comprehensive evaluation. The results showed that the physiological indicators positively correlated with the growth indicators of Phoebe bournei included soluble protein content, soluble sugar content, net photosynthetic rate, stomatal conductance, transpiration rate, chlorophyll a content, chlorophyll b content, carotenoid content, chlorophyll a + b content, total nitrogen content in leaves, total phosphorus content in leaves, and total potassium content in leaves. These indicators showed a trend of increasing first and then decreasing with the increase of sludge biochar, and multiple indicators reached the highest in the T2 (B10%) treatment group. The physiological indicators negatively correlated with the growth indicators and soil nutrient indicators included malondialdehyde content, intercellular CO₂ concentration, soil organic matter content, total nitrogen content in soil, total phosphorus content in soil, and total potassium content in soil. The soil nutrient indicators showed a gradually increasing trend with the increase of sludge biochar. The membership function analysis showed that the T2 treatment was the best, with the highest comprehensive score. In conclusion, appropriate application of sludge biochar can promote plant growth, while excessive application can be toxic to Phoebe bournei. The seedlings of Phoebe bournei grew best under the T2 treatment.