Previous investigations showed that cationic polyacrylamide (cPAM), a flocculant widely used in wastewater pretreatment and waste activated sludge dewatering, deteriorated methane production during anaerobic digestion of sludge. However, details of how cPAM affects methane production are poorly understood, hindering deep control of sludge anaerobic digestion systems. In this study, the mechanisms of cPAM affecting sludge anaerobic digestion were investigated in batch and long-term tests using either real sludge or synthetic wastewaters as the digestion substrates. Experimental results showed that the presence of cPAM not only slowed the process of anaerobic digestion but also decreased methane yield. The maximal methane yield decreased from 139.1 to 86.7 mL/g of volatile suspended solids (i.e., 1861.5 to 1187.0 mL/L) with the cPAM level increasing from 0 to 12 g/kg of total suspended solids (i.e., 0–236.7 mg/L), whereas the corresponding digestion time increased from 22 to 26 d. Mechanism explorations revealed that the addition of cPAM significantly restrained the sludge solubilization, hydrolysis, acidogenesis, and methanogenesis processes. It was found that ∼46% of cAPM was degraded in the anaerobic digestion, and the degradation products significantly affected methane production. Although the theoretically biochemical methane potential of cPAM is higher than that of protein and carbohydrate, only 6.7% of the degraded cPAM was transformed to the final product, methane. Acrylamide, acrylic acid, and polyacrylic acid were found to be the main degradation metabolites, and their amount accounted for ∼50% of the degraded cPAM. Further investigations showed that polyacrylic acid inhibited all the solubilization, hydrolysis, acidogenesis, and methanogenesis processes while acrylamide and acrylic acid inhibited the methanogenesis significantly.