Hydrothermal liquefaction (HTL) is a promising technology for the production of bio-crude. However, some unresolved issues still exist within HTL, which need to be resolved before its promotion on a commercial scale. The management of the aqueous phase is one of the leading challenges related to HTL. In this study, the sewage sludge has been liquefied at 350 °C with and without catalyst (K₂CO₃). Subsequently, aqueous phase recycling was applied to investigate the effect of recycling on bio-crude properties. Obtained results showed that the energy recovery in the form of bio-crude increased by 50% via aqueous phase recirculation, whereas nitrogen content in the bio-crude was approximately doubled after eight rounds of recycling. GCMS characterization of the aqueous phase indicated acetic acid as a major water-soluble compound, which employed as a catalyst (0.56 M), and resulted in a negligible increase in bio-crude yield. ICP-AES highlighted that the majority of the inorganics were transferred to the solid phase, while the higher accumulation of potassium and sodium was found in the aqueous phase via successive rounds of recycling.