An alumina–magnesia precast block was prepared by using high-alumina fused corundum as aggregate, and fused magnesia, ultra-fine Al2O3 and SiO2 powders as matrix materials. A small linear expansion for the precast block was achieved through spinel formation from the reaction of MgO with Al2O3 in the matrix. The precast block showed a lower apparent porosity, higher modulus of rupture and better slag corrosion resistance compared to the traditional Al2O3–MgO–C brick. In addition, the practical application of the precast block to the ladle lining proved it to possess a better thermal insulation which could effectively prevent the temperature drop of molten steel during the refining process. It can be considered that the alumina–magnesia precast block could possibly be applied as a new type of ladle lining material for the production of low-carbon and ultra-low-carbon steel.