This paper proposes a fractional-order chaotic system using a tri-stable locally active memristor. The characteristics of the memristor, dynamic mechanism of oscillation, and behaviors of the proposed system were analyzed, and then a visually meaningful image encryption scheme was designed based on the chaotic system, DNA encoding, and integer wavelet transform (IWT). Firstly, the mathematical model of the memristor was designed, which was nonvolatile, locally active, and tri-stable. Secondly, the stability, dynamic mechanism of oscillation, bifurcation behaviors, and complexity of the fractional-order memristive chaotic system were investigated and the conditions of stability were obtained. Thirdly, the largest Lyapunov exponent, bifurcation diagram, and complexity of the novel system were calculated and the coexisting bifurcation, coexisting attractors, spectral entropy, and so on are shown. Finally, a visually meaningful image encryption scheme based on the proposed system was designed, and its security was assessed by statistical analysis and different attacks. Numerical simulation demonstrated the effectiveness of the theoretical analysis and high security of the proposed image encryption scheme.