The growing emphasis on sustainable construction has intensified research into alkali-activated concrete (AAC) as an eco-friendly alternative to conventional Portland cement-based concrete. This review evaluates the physical, mechanical, and sustainability properties of AAC synthesized from industrial by-products, including FA, GGBFS, and metakaolin. The role of these precursors in enhancing AAC's performance is critically examined, focusing on mechanical strength, durability, and environmental benefits. Key findings reveal that AAC significantly reduces carbon emissions due to the lower embodied energy of its raw materials. Although initial production costs may be higher due to the price of alkali activators, the long-term economic and environmental advantages justify its adoption. The selection of activators and mix design optimization is essential to ensure performance consistency. Despite promising laboratory results, the lack of standardized codes and limited long-term durability data restricts AAC's broader industrial application. This review highlights the urgent need for comprehensive guidelines and sustainability assessments specific to AAC. By addressing these critical research gaps, this study contributes to the ongoing development of AAC, emphasizing its potential to transform the construction industry through reduced environmental impact and enhanced material performance. The insights provided will assist researchers, industry professionals, and policymakers in advancing sustainable construction practices through AAC adoption.