Marine clay, a common waste product abundantly available in coastal regions, can serve as an alternative silica source after activation due to its pozzolanic reactivity. In this study, a binder comprising reactive MgO cement and thermally activated marine clay (AMC) was developed. It was found that the developed MgO-AMC binder with a mass ratio of MgO to AMC of 0.4 to 0.6 achieved a 28-day compressive strength of 20.4 MPa under ambient curing. Through accelerated carbonation curing, the highest 28-day compressive strength increased by 45%, and the highest carbon sequestration ratio reached 11.8%. The phase evolution and microstructural development of hydrated/carbonated binder were comprehensively investigated by TG-IR, XRD, NMR, and SEM-EDS. In addition, thermodynamic modelling was performed to further understand the phase assemblage of the hydrated binder, and indicated that M-A-S-H phase was thermodynamically more stable in the developed binder.