Abstract: In 2020, the municipal solid waste removal and transportation volume reached 235.117 million tons, of which 146.076 million tons were incinerated in China. Because it can reduce the harmfulness of waste and recycle energy, municipal solid waste incineration (MSWI) technology has become the primary method for the disposal treatment of urban domestic waste in China. However, this method produces MSWI fly ash, which is defined as a hazardous waste rich in dioxins and heavy metals. Calculated based on 5% (mass fraction) of the original waste, the output of MSWI fly ash in China nearly reached 7.304 million tons in 2020. Moreover, the stockpile management and treatment capacities are seriously out of balance. At present, the main disposal method of MSWI fly ash is landfilling, which consumes land resources and poses an environmental hazard. As a result, the harmlessness and recyclability of MSWI fly ash have become a bottleneck for green development. In this review, the harmless melting and recycling of MSWI fly ash are introduced in detail. The mechanisms of heavy metal solidification and dioxin degradation during MSWI fly ash melting have been explained. MSWI fly ash can be transformed into glass slag containing CaO−SiO₂−Al₂O₃ after co-melting with other solid wastes rich in silicon aluminum oxide. Heavy metals in MSWI fly ash can be solidified at the atomic scale in the silicate network of glass. More importantly, as the temperature increases beyond 800 °C, dioxins undergo dechlorination and degradation, reducing the harmfulness and revealing the harmlessness of MSWI fly ash. This review also describes how to deal with the glass slag that forms because of co-melting. The glass slag has low added value and poor mechanical properties. Future disposal trends for vitrified slag from MSWI fly ash, including glass–ceramic, glass–ceramic foam, and cementitious materials, have been proposed. Given that vitrification can solidify heavy metals in the process of subsequent resource usage and product service, the migration and leaching characteristics of heavy metals need to be further investigated. This study provides a reference for the comprehensive usage of MSWI fly ash.