The preparation of phosphogypsum-based fine lightweight aggregate (PG-LWA) by using activator, slag powder and phosphogypsum (PG) is one of the effective ways to recycle PG. In this paper, the preparation method of PG-LWA was introduced, and the quality of PG-LWA was evaluated from the aspects of physical properties, strength and microstructure. PG-LWA was used to prepare cement mortar, and the expansion, setting time and mechanical properties of mortar samples were tested. The results show that during the preparation of PG-LWA, the raw materials undergo alkali activation reaction to form hydrated calcium silicate (C-S-H) and ettringite (AFt). When the mass fraction of PG is 70%, the fineness modulus of the prepared PG-LWA is 4.4, the cylinder compressive strength at over dry is 4.65 MPa, and the porosity is 37.29%. When the water-binder ratio is 0.5 and the mass fraction of PG is 70%, the expansion degree of cement mortar prepared by replacing sand with PG-LWA is 213 mm, the final setting time is 300 min, and the 28 d compressive strength is 22.1 MPa.