The use of Recycled Fine Aggregate (RFA) combined with Limestone-Calcined Clay Cement (LC3) is one of the low-carbon options for replacing ordinary mortar, leading to an eco-friendly and sustainable construction material, and providing a solution for waste management. In this paper, a comprehensive investigation concerning the mechanical properties and microstructural characteristics of LC3 mortar, using different proportions of limestone, calcined clay, cement clinker, and two types of RFA (namely RS1 and RS2), was carried out. The results highlight that a binder with 17.55 wt% calcined clay, 8.77 wt% limestone, and 73.68 wt% CEM I shows superior mechanical properties compared to CEM I with both natural sand and high-quality recycled sand, and similarly it shows better mechanical properties than CEM II at all levels of substitution of natural sand with recycle sands of high and normal quality. The replacement of commercial cement with LC3 mitigates the negative impact of RFA on water absorption, enhances pore size distribution, reduces total porosity, and boosts mechanical strength. The combination of RFA with LC3 is an effective approach to reduce the environmental impacts of cement production, to well manage wastes generated by construction and demolition, and to improve material's performances.