This paper investigates the effect of fineness of fly ash on the performance of cement mortar. Fly ash from thermal plant is used as partial substitute for cement. Fly ash is used as received and also processed by grinding. The study involves four replacement levels of fly ash into cement at 10%, 20%, 30% and 40% for each mix design. Mortar cubes are tested for strength, water absorption and sorption. Water absorption and sorption show a decreasing trend with the increase of fly ash fineness; whereas the strength increases with the increase of fineness. It is concluded that increasing the fineness of fly ash increases the strength and reduces absorption by 15% and hence is an effective method to improve its performance in cement mortar