Developing a fast, cost-effective, eco-friendly solution to recycle large amounts of construction and demolition waste (CDW) generated from construction industry-related activities and natural disasters is crucial. The present investigation aims to offer a solution for repurposing CDW into building materials suitable for accelerated construction and housing in developing countries and disaster-prone areas. Feasibility of recycled concrete aggregate (RCA) inclusion in geopolymer mortars constituted entirely from CDW (masonry elements) was investigated via an environmental impact-oriented approach by addressing the composition related key parameters. Mechanical performance was evaluated through compressive strength tests, and scanning electron microscope (SEM) imaging with line mapping analyses were carried out to monitor the interfacial transition zone (ITZ) properties. To investigate the environmental impacts of the geopolymer mortars and highlight the advantages over Portland cement-based mortars, a cradle-to-gate life cycle assessment (LCA) was performed. Findings revealed that roof tile (RT)-based geopolymer mortars mainly exhibited better strength performance due to their finer particle size. Mixtures activated with 15 M NaOH solution and cured at 105 °C achieved an average compressive strength above 55 MPa. RCA size was the most influential parameter on compressive strength, and a smaller maximum RCA size significantly increased the compressive strength. Microstructural analyses showed that the ITZ around smaller RCAs was relatively thinner, resulting in better compressive strength results. LCA proved that CDW-based geopolymer mortars provide the same compressive strength with around 60% less CO2 emissions and similar energy consumption compared to Portland cement-based mortars.