The disposal of fly ash has become a serious problem in China due to its rapid increase in volume in recent years. The most common method of fly ash disposal is solidification-stabilization-landfill, and the most common reuse is low-value-added building materials. A novel processing method for preparing ultra-lightweight ceramsite with fly ash was developed. The results show that the optimal parameters for preparation of ultra-lightweight ceramsite are as follows: mass ratio of fly ash:kaolin: diatomite =80:15:5, preheating temperature of 800C, preheating time of 5 min, sintering temperature of 1220°C, and sintering time of 10 min. The expansion agent is perlite, at 10 wt.% addition. Finally, a ceramsite with bulk density of 340 kg/m, particle density of 0.68 g/cm³, and cylinder compressive strength of 1.02 MPa was obtained. Because of its low density and high porosity, ultra-lightweight ceramsite has excellent thermal insulation performance, and its strength is generally low, so it is usually used in the production of thermal insulation concrete and its products. The formation of a liquid-phase component on the surface, and generation of a gas phase inside ceramsite during the sintering process, make it possible to control the production of the suitable liquid phase and gas in this system, resulting in an optimization of the expansion behavior and microstructure of ceramsite. These characteristics show the feasibility of industrial applications of fly ash for the production of ultra-lightweight ceramsite, which could not only produce economic benefits, but also conserve land resources and protect the environment.