Highly porous and hydrophobic silica aerogel is fabricated using fly ash and trona ore as the starting materials and the cost-effective ambient pressure drying technique. The optimal calcination parameters are determined as temperature of 850°C, holding time of 2h, and the trona ore/fly ash mass ratio of 1.4. The CO2 release mechanism during calcination is proposed and has been verified by the Thermogravimetric and Differential Scanning Calorimetry analysis (TG/DSC) and X-ray fluorescence (XRF) technique. The hydrogel is derived from reacting the calcination mixture with sulphuric acid solution, followed by filtration. The impurities can be effectively removed through water washing and solvent exchange processes. No ion exchange resin is used in this preparation method, and thus it is a safe, inexpensive and much more straightforward process. In order to minimize drying shrinkage, the hydrogel is first transformed into an alcogel by soaking in ethanol, after which the alcogel is surface modified with the hexane/ethanol/trimethylchlorosilane (hexane/ethanol/TMCS) mixture solution. It has been observed that the specific surface area, BJH desorption pore volume, and BJH desorption average pore diameter all first increase and then decrease so that reach to the maximum values once the heat treatment temperature approaches 500°C due to the oxidation of CH3 groups on the silica skeleton surface. The final product presents special characteristics including: (1) high thermal stability for maintaining hydrophobicity up to 476°C, (2) contact angle of the as-dried silica aerogel as high as 151°, (3) silica particle size of ca. 3–6nm, agreeing well with the model as reported, (4) and the 500°C heat treated sample possessing a large specific surface area of 856.2m2/g, a large pore volume of 2.92cm3/g, and a BJH desorption average pore diameter of 17.1nm. The proposed inexpensive approach produces silica aerogel with superior properties and is a scalable-manufacturing method for large-scale industrial production.