Using alkali pretreatment can effectively remove residual variable-valence metals from non-metallic powder (WPCBP) in waste printed circuit boards. However, substantial amounts of waste lye are generated, which causes secondary pollution. On this basis, this study innovatively utilized waste alkali lye to prepare nano-magnesium hydroxide. When the dispersant polyethylene glycol 6000 was used at a dosage of 3 wt.% of the theoretical yield of magnesium hydroxide, the synthesized nano-magnesium hydroxide exhibited well-defined crystallinity, good thermal stability and uniform particle size distribution, with a median diameter of 197 nm. Furthermore, the in situ method was selected to prepare WPCBP/Mg(OH)2 hybrid filler (MW) and the combustion behavior, thermal and mechanical properties of PP blends filled with MW were evaluated. The combustion behavior of the PP/MW blends increased with the increasing hybrid ratio of Mg(OH)2, and the MW hybrid filler reinforced PP blends showed better thermal and mechanical properties compared to the PP/WPCBP blends. Furthermore, the dynamic mechanical properties of the PP/MW blends were also increased due to the improved interfacial adhesion between the MW fillers and PP matrix. This method demonstrated high economic and environmental value, providing a new direction for the high value-added utilization of WPCBP.