Urban cable tunnels in mountainous areas face severe challenges in fire prevention and control due to the complex terrain characteristics such as large burial depth, high drop, and many turns, as well as the high percentage of non-flame-retardant cables, broken outer sheaths, and other hidden problems. In this paper, the suppression mechanism of carbon dioxide (CO2) on cable fire and engineering application technology are systematically studied by combining experiments and numerical simulations. The effects of different CO2 volume concentrations (0–60%) on the explosion pressure of 9.5% CH4-Air mixture were tested, and the chemical inhibition mechanism of CO2 was revealed by combining with the CHEMKIN-Pro software to simulate the key radical changes and the sensitivity of the primitive reactions. The results show that the increase of CO2 concentration can significantly reduce the maximum explosion pressure (up to 65.51% at 60% concentration), and its inhibitory effect is mainly realized by consuming •H, promoting the reverse reaction (OH + CO < = > H + CO2), and decreasing the probability of collision of activated molecules. The results of the study provide a theoretical basis for fire fighting in mountainous urban cable tunnels.