A novel magnetic hydrothermal carbon (MHC) was prepared from agricultural waste rice straw, using a two-step method combining hydrothermal carbonization and chemical co-precipitation. This material was used to improve anaerobic azo dye decolorization. It was characterized using detection methods such as X-ray diffraction (XRD), specific surface area testing (BET), scanning electron microscopy (SEM), and infrared spectroscopy analysis (FTIR). The material was introduced into an anaerobic sludge decolorization system. The results showed that under the conditions of chromium black T concentration of 300 mg/L, initial solution pH of 7.0, temperature of 30 ℃, MHC dosage of 5.0 g/L, and 20% sludge inoculation, chromium black T removal reached 96.3% after 8 hours, which was 15.6% higher than that of the control. We investigated the effects of sludge inoculation amount, electron donor type, MHC dosage, initial solution pH, and temperature on the anaerobic decolorization efficiency. Decolorization efficiency increased with high sludge inoculation rates and MHC dosage. Glucose and sucrose were more suitable as electron donors, and lower solution pH led to higher dye removal rates. The optimal reaction temperature was determined to be 30 ℃. Short-term anaerobic decolorization experiments showed that a smaller increase in microbial reactive oxygen species levels in the enhanced system versus the control group, along with higher superoxide dismutase and catalase activities. Magnetic hydrothermal carbon was beneficial for alleviating the toxic effects of adverse environments on microorganisms.