During the treatment of oily wastewater produced from polymer flooding (OWPF) by cationic flocculant, oil sludge containing the polymer could be formed. In this paper, the formation mechanism of the oil sludge was discussed for the first time and a novel method was proposed for dissolving the oil sludge. The investigation showed that the polyelectrolyte complex could be formed between the cationic flocculant and the polymer in the OWPF. The polyelectrolyte complex was cross-linked and was insoluble in the water. Oil droplets may be bound by the complex, and the oil sludge was formed. It was found that the oil sludge can be dissolved in sodium dodecyl sulphate (SDS) solution, and the mechanism study showed that SDS can destroy the water-insoluble polyelectrolyte complex. Finally, a water-soluble cationic flocculant-SDS complex was formed.