Preparation and characterization of activated carbons (ACs) from oily sludge by physical and chemical activation using steam, ZnCl2 and FeCl3 were investigated. The characteristics of produced adsorbents were determined by iodine number, Brunauer–Emmett–Teller (BET) equation, Fourier transform infrared spectrometry and scanning electron microscopy analyses. Batch adsorption experiments for phenol and phosphate were performed to evaluate the efficiency of adsorbents. The optimum porous structure of adsorbents with a BET surface area of 1,259 m2 g−1, total pore volume of 1.22 cm3 g−1 and iodine number of 994 mg g−1 was achieved by ZnCl2 activation at 500 °C and impregnation ratio of 1:1. The adsorption data were well fitted to the pseudo-second-order kinetic model (R2>0.99) and Freundlich isotherm (R2>0.99). The maximum adsorption capacity of phenol (238 mg g−1) and phosphate (102 mg g−1) based on the Langmuir model was achieved at pH of 6.0 and adsorbent dose of 1 g L−1. Thermodynamic parameters were negative and showed that adsorption of phenol and phosphate onto the AC was feasible, spontaneous and exothermic. The results suggested that prepared AC was an effective adsorbent for removal of phenol and phosphate ions from the polluted water.