The gaseous mercury conversion between elemental mercury and oxidized mercury in the flue gas cooling process is a key problem in the mercury emission study. This paper focused on the effect of basic fly ash compositions, such as CaO, which may react with chlorine to produce CaCl2 in the same temperature range as mercury oxidation, hence decrease the chlorine concentration in flue gas and inhibit the oxidation of mercury. The thermodynamic equilibrium simulation shows that, in CaO-bearing flue gas, the stable Cl species shift from HCl to CaCl2 below 900 K and the conversion temperature between Hg and HgCl2 decreases as the CaO concentration increases. On-site experimental results in power plants by applying the Ontario Hydro method also supported this conclusion.