Fly ash, a by-product of the coal-burning industry, and a potential source of ferro-alumino-silicate minerals, which contains high amount of ferric oxide and manganese oxide (electron acceptors), was selected as soil amendment for reducing methane $(CH_4)$ emission during rice cultivation. The fly ash was applied into potted soils at the rate of 0, 2, 10, and 20 Mg $ha^{-1}$ before rice transplanting. $CH_4$ flux from the potted soil with rice plants was measured along with soil Eh and floodwater pH during the cropping season. $CH_4$ emission rates measured by closed chamber method decreased gradually with the increasing levels of fly ash applied but rice yield significantly increased up to 10 Mg $ha^{-1}$ application level of the amendment. At this amendment level, total seasonal $CH_4$ emission was decreased by 20% along with 17% rice grain yield increment over the control. The decrease in total $CH_4$ emission may be attributed due to suppression of $CH_4$ production by the high content of active and free iron, and manganese oxides, which acted as oxidizing agents as well as electron acceptors. In conclusion fly ash could be considered as a feasible soil amendment for reducing total seasonal $CH_4$ emissions as well as maintaining higher grain yield potential under optimum soil nutrients balance condition.