Circulating fluidized bed combustion fly ash (CFBCA) is a by-product of the coal-fired process in power plants. In this paper, the hydration characteristics of CFBCA are studied. The pozzolanic activity of CFBCA and pulverized coal combustion fly ash (PCA) at different ages was tested, the hydration products, microstructure of CFBCA-cement paste and PCA-cement paste and the elements distribution of Si, Al and Ca on the surface of fly ash particles were studied. Then the effects of pH value and SO3 content on the dissolution of active SiO2 and active Al2O3 from CFBCA and PCA were further discussed. The experimental results show that the pozzolanic activity of CFBCA is higher than that of PCA, and the surface of CFBCA is more easily corroded and the active SiO2 and active Al2O3 are easy to dissolve in the hydration process. CaO and anhydrite (CaSO4•II) contained in CFBCA play an important role in promoting the dissolution of active SiO2 and active Al2O3. In addition, the loose structure of CFBCA and the low degree of polymerization of [SiO4] and [AlO6] are also one of the reasons for its higher hydration activity than PCA. Relevant research revealed the hydration mechanism of CFBCA, and provided a theoretical basis for its application in cement and concrete.