The remarkable properties of graphene oxide (GO) make it as an ideal candidate for developing high performance cementitious composites. In this study, it is the first time to investigate the early-age physical adsorption and chemical interactions between the GO and cement hydrates, which have a great influence on the hydration development, microstructures and drying shrinkage of the GO modified cement paste. The experimental results indicated that the addition of GO led to the decreased fluidity of cement paste, resulting from the rapid interaction between the GO and divalent metal cations released from cement hydrates, characterized by Ultraviolet-visible spectroscopy and X-ray photoelectron spectroscopy. It was found that 0.08 wt% GO improved the cement hydration rate/heat by accelerating the cement dissolution, providing nucleation site and regulating the microstructure of cement hydrates. The GO covered cement hydrates at the hydration of 10 min was characterized by scanning electron microscopy. Moreover, the addition of GO restricted the 28-day drying shrinkage of cement paste due to the more compacted microstructures and self-curing effect at the early age. In conclusion, the research finding gives a thorough understanding on early-age interaction mechanism when the GO is immediately mixed with cement particles, and provides a valuable guidance to the sustainable design of GO modified cementitious materials for construction use.