A system for recycling drilling sludge is disclosed. The system has a treatment area and a salt-tolerant bio-reactor coupled to the treatment area. The bio-reactor has i) at least one bio-suspension element for supporting the growth of at least one type of biological microorganism within an enclosed flow zone; ii) an agitator for creating a flow of the drilling sludge through the enclosed flow zone at a flow rate; and iii) an aerator for providing a gas to the enclosed flow zone. The system also has a processor coupled to the agitator and configured to create at least a minimum self-cleaning drag force between drilling sludge passing through the enclosed flow zone and the combined at least one type of biological microorganism and the at least one bio-suspension element. A related method and bio-reactor are also disclosed.