Dust explosions caused by energetic metals pose a significant risk to process industries, making it crucial to develop high-performance explosion inhibitors. In this study, the modified power plant solid waste fly ash (FA) was confirmed as a raw material for the preparation of core–shell inhibitors to efficiently suppress dust explosion of Al-Mg alloy. The interfacial compatibility of FA was dramatically improved by using alkali hydrothermal modification and organic modification. It formed a well-coated nano-Mg(OH)2 cladding layer on the surface of modified FA by the heterogeneous nucleation method. In a vertical combustion pipe and a 20 L spherical explosion device, the suppression effect of this novel core–shell inhibitor (FA-2@Mg(OH)2) was investigated. The experimental results showed that the addition of 60 wt% of FA-2@Mg(OH)2 reduced the maximum flame velocity (Vmax), velocity to the top of the pipe (Vtop), and average pulsation degree (Vap) by 87.9 %, 92.5 %, and 87.7 %, respectively, and the peak flame temperature (Tp) declined to 298 °C. The maximum explosion pressure (Pmax) and the maximum explosion pressure rise rate ((dp/dt)max) were reduced by 86.1 % and 92.9 %, respectively. Combining the analysis results of SEM, EDS, XRD, and TG-DSC, the suppression mechanism of FA-2@Mg(OH)2 was explained in depth, mainly from the heat absorption, coating effect, gas dilution, and radical adsorption. This work not only sheds new light on the design of dust explosion suppression functional materials but also broadens the application of industrial solid waste FA.