Alkali-activated materials are considered as potential alternatives to Portland cement. However, their high shrinkage rate remains a critical issue limiting widespread application. This study investigated the relationship between drying shrinkage and water loss rate of alkali-activated slag-fly ash paste. It examined the effect of fly ash content on compressive strength, reaction products, microstructure and hydration heat. The results show that with the increase of fly ash content, both drying shrinkage and water loss rate of alkali-activated slag increase. The fly ash content significantly affects the compressive strength of alkali-activated slag paste. In the early hydration stage (0~14 d), samples without fly ash exhibit higher compressive strength. However, in the later stage (14~28 d), samples with 20% (mass fraction) and 30% fly ash show a significant increase in strength. When the fly ash content is 20% and 30% and the Ca/Si ratio (molar ratio) is close to 1, it ensures strength development while reducing drying shrinkage and water loss rate.