The hydration reaction of the slag-gypsum system was studied by X-ray diffraction, differential thermal analysis, optical icroscopic observation, and measurement of heat liberation of hydration. 1. Domestic granulated slag was almost noncrystalized state, and its mineral compositions calculated were 46.53% of gehlenite, 28.14% of akermanite, and 19.04% of wollastonite. 2. The slag quenched with water at relatively high temperature had better reactivity. 3. The production of ettringite, CSH gel and AH3 gel were stimulated by effect of $Ca(OH)_2$, $Mg(OH)_2$ and calcined dolomite as activators, and the strength of hardened body would be developed by forming compacted microstructure.