To validate the feasibility of magnesium hydroxide (MH) used as flame retardant, thermogravimetry experiments and the thermal analysis kinetics method were used to investigate the effects of MH on combustion properties of asphalt binder. The results indicate that the combustion process of asphalt binder is multistage. Due to MH thermal decomposition, the temperature rising in asphalt binder is inhibited, and the increase in residue yield ratio on asphalt material surface facilitates to retard the further combustion of asphalt binder. Also, combustion models for asphalt binder and flame-retarding asphalt binder in each combustion stage all follow nucleation and nuclei growth models. Three-stage combustion kinetics models are developed to predict combustion process of asphalt binder. It is concluded that the thermal stability of asphalt binder is improved by mixing MH, and MH can be used as a flame retardant in tunnel asphalt pavement to replace part filler during the asphalt pavement construction.