<p>Perlite is a naturally volcano-made material and expands when exposed to elevated temperatures to become lightweight. The transformation makes this material highly valuable in sustainable construction, due to its ability to provide excellent thermal insulation and fire resistance, making the buildings more energy-efficient. This review paper examines the incorporation of both expanded perlite (EP) and raw perlite (RP) in the cementitious composites, by focusing on their impact on the thermal insulation, fire resistance, durability, and mechanical behavior. It also explores how the perlite’s geographical origin affects its chemical and physical properties. In addition, the paper addresses the challenges related to incorporation higher ratios of perlite in the cementitious composites such as the increased porosity and the lower strength. The adaptability of perlite to be used in novel uses is also discussed. Moreover, the paper identifies critical gaps in research and outlines future directions to improve durability and perlite-based applications.</p>