Developing a greener, sustainable catalyst is a very important but challenging task in organic synthesis. Herein, for the first time, we choose more economical and greener surface modified sewage sludge-derived carbonaceous materials (SW) treated by perchloric acid as a new catalyst for carbene insertion of α-aryl α-diazoacetates into O-H bonds of phenols with good yields and high functional group tolerance. Significantly, we explored the scope of natural phenols with compelling biological activity, and successfully afforded the O-H insertion and meta C-H functionalization products. Their structures have been confirmed by single-crystal X-ray crystallography. Furthermore, the bioactivities (anti-tumor and anti-inflammatory) of the majority of O-H insertion products are better than those of the natural phenols themselves. The IC50 values indicated that the remarkable compounds 7a (IC50 = 16.80 μM) and 7c (IC50 = 16.48 μM) had better inhibition for tumor cell A-549 than positive control DDP (IC50 = 20.62 μM). It should be noted that these transformations may provide a new strategy to derive natural products and discover new drugs.