Steel slag is a by-product in steel production process with considerable volume and low utilization rate in China. This paper investigated the fundamental and industrial feasibility of preparation and properties of high acidity coefficient slag wool using steel slag and fly ash (FA) as raw materials. Slag samples with 30–50 wt % steel slag were modified by FA and viscosity of the modified melts were tested by rotating cylinder method. The slag samples were melted in cupola furnace and then produced into slag wool through melt spinning fiberization method. Modification of steel slag, viscosity of the modified melts and industrial parameters were systematically investigated. Produced slag wool were characterized by X-Ray diffraction, scanning electron microscope and differential thermal analysis. Properties (acidity coefficient, average diameter, shot content, thermal conductivity, etc.), leaching tests and radionuclides were tested according to Chinese national standards. High acidity coefficient slag wool produced by steel slag and FA exhibited properties superior to industrial rock wool. Steel slag and FA can be massively utilized and huge amount of natural resources can be correspondingly saved by substituting rock wool with the slag wool.