This study used urban sewage-treated sludge and soil from rocky desertified areas in Harbin, China, as experimental materials. Through indoor pot experiments, different proportions of sludge were applied to rocky desertified soil, and Alfalfa (Medicago sativa) was planted to explore the effects of sludge addition on the photosynthesis and growth of alfalfa seedlings during the seedling stage. The study aims to provide a scientific basis for the resource utilization of urban sludge in Harbin. The results show that as the proportion of added sludge increases, the organic matter, total nitrogen, total phosphorus, available nitrogen, and available phosphorus in the soil significantly increase. However, the content of heavy metals also increases, especially when the sludge addition ratio reaches 60% to 75%, the cadmium (Cd) and zinc (Zn) content in the soil exceeds the "Soil Environmental Quality Risk Control Standard for Soil Pollution of Agricultural Land (Trial) (GB 15618-2018)" limits. At a sludge addition ratio of 15% to 45%, the transpiration rate, stomatal conductance, net photosynthetic rate, and water use efficiency of alfalfa increase with growth time. However, at a sludge addition ratio of 60% to 75%, the growth rates of these indices significantly decrease. This study also establishes a foundation for future long-term monitoring to assess the sustained impacts of sludge application on soil quality and alfalfa growth.