Calcined Hwangtoh (HT) clay is a very promising supplementary cementitious material (SCM). In this work, the development of the mechanical properties and microstructures of HT-blended cement paste was studied after substituting the binder with HT powder calcined at 800 °C. The water-to-binder (w/b) ratios of the paste used were 0.2 and 0.5, and the quantities of HT powder added to the mixture were 0, 10, and 20%. The compressive strength test indicates that the addition of the HT powder increases the compressive strength of the paste after seven days of curing, and the highest compressive strength is obtained with the 10% HT substitution, regardless of whether the w/b ratio is 0.5 or 0.2. X-ray fluorescence (XRF), X-ray diffraction (XRD), inductively coupled plasma mass spectrometry (ICP-MS), isothermal calorimetry, thermogravimetric analysis (TGA), and attenuated total reflection Fourier transform infrared spectroscopy (ATR-FTIR) analysis show that the HT powder not only has a physical effect (i.e., nucleation effect and dilution effect) on cement hydration but also has a chemical effect (i.e., chemical reaction of HT). The results of scanning electron microscopy (SEM) and mercury intrusion porosimetry (MIP) analysis show that the paste has more ettringite during the early stage, and the microstructure is refined after the addition of the HT powder. In addition, the relationships between chemically bound water, hydration heat, and compressive strength are presented.