Construction and demolition waste (CDW) has begun to take its toll on the environment. One option to mitigate the negative influence is to utilize CDW as recycled aggregate (RA) in concrete production. Recycled aggregate concrete (RAC) mixtures prepared by replacing natural aggregate (NA) with RA, with expansive agent (EXP) and polypropylene fiber (PPF) as additives, have been cast to study their mechanical properties and environmental impact. The results of compressive strength testing reveal that both additives, EXP and PPF, have positive effects on the mechanical properties. The microscopic analysis shows that the hydration reaction of EXP generates ettringite crystals which fill the internal pores of the concrete and increase the compactness of the concrete. Fiber can significantly improve the bonding between cement paste and aggregates, thus enhancing the deformation resistance of concrete. Environmental analysis shows that the leaching amount of heavy metals is very limited which is within 11.67% of the required value in China standard, and carbon emission of concrete with RA as aggregates and fly ash as low-carbon binder is lower than that of concrete without RA. The use of CDW recycled aggregates may significantly mitigate the environmental impact and improve the sustainability during concrete production.