The effect of fly ash on hydration properties of cement is the theoretical basis of the application of fly ash in cement-based materials. In order to clarify the effect, hydration properties of Portland cement, such as hydration rate, hydration product and microstructure, were investigated by image analysis, thermal analysis and X-ray diffraction in this paper. The differences between the cement slurry with and without fly ash were discussed to gain clarity of the effect of low calcium fly ash on the hydration progress of the cement. Fly ash promoted Ca(OH)₂ formation within the first 24 hours, and increased the amount of Ca(OH)₂ and chemically bound water produced by unit mass cement hydration by 20.4 % and 13.0 %, respectively. The progress of hydration of the clinker minerals was accelerated in the late stage, most notably C₄AF. Due to “dilution” and “adsorption” effects, fly ash delayed or even prevented the formation of inner hydration products and prolonged the existing time of Hadley particles. At the age of 7 days, the interspace between unhydrated clinker core and the outer hydration products reached up to about 18 μm in fly ash blended slurry. These long-lasting interspaces facilitated the migration of ions and water, which should be a very important reason for the accelerated hydration of the cement by fly ash. In addition, fly ash stabilized ettringite and delayed its conversion to monosulfate, which was more likely due to the continuous release of sulfate ions from fly ash than delayed C₃A hydration.