Previous studies had indicated that the thermal load of pure fly ash combustion was limited by the small superficial velocity of the furnace. Hence, the combustion characteristics of residual carbon in fly ash at high concentration of oxygen were studied on a modified CFB test rig in an attempt to increase the combustion thermal load and improve the burnout behavior of the char particles. The effect of initial O-2 concentration (or excess oxygen coefficient) on thermal load, combustion performance of the test rig, and the ash behavior after burning were investigated. Results showed that the fly ash with high carbon content could be used as a low heat value fuel in high oxygen concentration combustion condition. The thermal load under pure-oxygen combustion condition was equivalent to that of the coal-fired circulating fluidized bed boilers. Furthermore, the burnout rate of char particles in fly ash and combustion efficiency of the test rig were greatly promoted as the excess oxygen coefficient increased. The quick and smooth transition behavior from air mode to oxy mode was observed, and a good fluidization condition during the transition process was achieved. In addition, fly ash mass distributions in the test rig and particle size distributions of fly ash resulting from air combustion and oxy-enriched combustion conditions were similar.