Oily-biological sludge (OBS) generated from petroleum refineries has high toxicity. Therefore, it needs an appropriate disposal method to reduce the negative impacts on the environment. The anaerobic co-digestion process is an effective method that manages and converts organic waste to energy. For effective anaerobic digestion, a co-substrate would be required to provide a suitable environment for anaerobic bacteria. In oily-biological sludge, the carbon/nitrogen (C/N) ratio and volatile solids (VS) content are very low. Therefore, it needs to be digested with organic waste that has a high C/N ratio and high VS content. This study investigates the use of sugarcane bagasse (SB) as an effective co-substrate due to its high C/N ratio and high VS content to improve the anaerobic co-digestion process with oily-biological sludge. The sugarcane bagasse also helps to delay the toxicity effect of the methane bacteria. Batch anaerobic co-digestion of oily-biological sludge was conducted with sugarcane bagasse as a co-substrate in twelve reactors with two-liter capacity, each under mesophilic conditions. The interaction effect of a C/N ratio of 20-30 and a VS co-substrate/VS inoculum ratio of 0.06-0.18 on the methane yield (mL CH4/g VSremoved) was investigated. Before the anaerobic digestion, thermochemical pre-treatment of the inoculum and co-substrate was conducted using sodium hydroxide to balance their acidic nature and provide a suitable pH environment for methane bacteria. Design and optimization for the mixing ratios were carried out by central composite design-response surface methodology (CCD-RSM). The highest predicted methane yield was found to be 63.52 mL CH4/g VSremoved, under optimum conditions (C/N ratio of 30 and co-substrate/inoculum ratio of 0.18). © 2020 by the authors.