The invention relates to a drying system utilizing residual heat in exhaust gas from kiln tail of a rotary kiln. The drying system comprises a vertical air-drying heat exchanger and auxiliary equipments including an exhaust gas inlet pipe, an exhaust gas outlet pipe, a feeding lifter, a feeding belt conveyer, a cyclone separator, a centrifugal blower, a discharge belt conveyer, a warehousing lifter, a dry slag warehouse, an air inlet port for vertical air-drying heat exchanger, a dry slag outlet port, a recycled material belt conveyer, a recycled material outlet port, a material inlet pipe for vertical air-drying heat exchanger, and an air outlet port for vertical air-drying heat exchanger. The system can effectively utilize the residual heat in the exhaust gas from the kiln tail of a rotary kiln to dry the raw material slag. The circulating load of the materials to be dried is 2-3 times of the yield of finished product. The inventive system has simple processes, simple structure of equipments, high heat exchange efficiency and high economic performance. The water content in the dried slag is not more than 1 percent. The inventive system overcomes the shortcomings of the existing slag drying using rotary type drying machine including high coal consumption and power consumption and environmental pollution due to large amount of dust emission. The invention reduces greenhouse gas emission and environmental pollution sources, improves economic benefit of enterprise, and brings distinct social benefit in the energy-saving and emission reduction project.