Amidst the challenges of increasing urbanization and the pressing need for sustainable green building and circular economy practices, the construction industry is actively pursuing innovative and eco-friendly solutions to reduce environmental impact, enhance resource efficiency, and ensure long-term sustainability. Recycling End-of-Life (EOL) concrete to replace cement and natural sand in cement-based products offers a promising approach to reducing carbon emissions and valorizing construction waste. However, the low reactivity of recycled concrete fines often compromises the mechanical and durability performance of concrete. This study investigates a novel thermo-mechanical treatment to convert EOL concrete into ultrafine recycled concrete powder (RCP) and recycled fine aggregate (RFA) suitable for use in sustainable cement mortar. The treatment involves a three-stage process, which comprises initial ball milling (for 30 min), thermal activation at 800 °C, and secondary ball milling (for 30 min). Experimental results show that mortar mixes with 5–15% treated RCP and 20% treated RFA exhibit up to 12% higher compressive strength and 5% improved flexural strength. Microstructural analysis revealed enhanced pozzolanic activity, improved interfacial transition zones, and better overall mortar performance due to the treatment of RCP. However, the combined addition of treated RCP and RFA reduced mortar flowability by 4–18%, primarily due to the porous and angular surface texture of RCP. Overall, the findings demonstrate that thermo-mechanically treated RCP and RFA can produce a sustainable mortar, with optimal performance at 10% RCP and 20% RFA as cement and sand replacements, offering a viable path for eco-friendly construction practices.