The characteristics of the hydration products and microstructural development of reactive MgO in the presence of metakaolin (MK) and silica fume (SF), along with thermodynamic modelling, are presented in this paper. The hydration products were characterized at different ages from 1 to 90 days. The hydration of MgO-MK mixes showed the formation of hydrotalcite like phase along with brucite and M-S-H. Coexistence of M-S-H and hydrotalcite was predicted from thermodynamic modelling in a system comprising of MgO, SiO2 and Al2O3. The voluminous nature of the hydration products helped in the development of a low porosity microstructure in MgO-MK mixes. The effects of a denser microstructure were evident from higher compressive strength across all ages and mix compositions compared to MgO-SF mixes. The bound water content of the hydration products showed a reasonable relationship with the compressive strength for both SF and MK mixes.