The increasing popularity of paste backfilling demands alternative binder optimisation and bulk waste disposal. This study investigates the efficacy of fly ash (FA) as partial replacement of ordinary portland cement (OPC) for paste backfill application in underground mines. The effect of FA addition on uniaxial compressive strength (UCS) and cohesion of paste backfill are demonstrated. The strength development was correlated with microstructural evolution using scanning electron microscopy (SEM)-energy dispersive X-ray spectroscopy (EDS). The study revealed that the rate of strength development in paste backfill slowed down when OPC was substituted by FA. However, the targeted 28 days' UCS of 1.1 MPa for the backfilling stope of lead-zinc mine was achieved with binder dosages of 8 wt% OPC, 7 wt% OPC, 6 wt% OPC, 7 wt% OPC +1 wt% FA and 6 wt% OPC +2 wt% FA. Thus, FA is a suitable binder substitute and up to 25% of OPC (8 wt%) can be replaced with FA. Analysis of microstructural evolution in paste backfill revealed that calcium silicate hydrate (C–S–H) did not develop in OPC-FA binder based paste backfill at its early days’ of curing and gypsum was found only in samples with OPC as sole binder. The multiple linear regression analysis on interaction effects of OPC, curing time, FA replacement percentage for 8 wt% and 5 wt% binder groups indicated that the UCS development is more sensitive towards FA replacement. The obtained results would help in better understanding and design of paste backfill for lead-zinc underground mines.