The use of recycled aggregates (RA) in concrete has gained increasing attention due to its potential to enhance sustainability in construction. However, the varying properties of different RAs can significantly impact concrete performance, both at the microstructural and macroscopic levels. A key factor influencing mechanical behavior of concrete is the interfacial transition zone (ITZ), where aggregates interact with cement paste. The ITZ plays a crucial role in determining concrete’s strength, durability, and overall performance. Despite its importance, many existing models oversimplify the ITZ as a uniform layer, ignoring its actual variability. This study examines the impact of spatially varying ITZ properties in concrete containing two different RAs, including abraded concrete aggregate (RCa) and recycled concrete aggregate (RCu). A micromechanical multiscale model is applied to represent the heterogeneous nature of concrete, spanning from the micrometer-scale of hydration products to the centimeter-scale of the bulk material. In addition to existing approaches, the present model incorporates the non-uniform characteristics of the ITZ. Using insights from nanoindentation and SEM-EDX analyses, it was observed that ITZ thickness, porosity, and mechanical properties vary depending on the type of RA and its interaction with the new cement paste. These variations are integrated into the micromechanical model, resulting in a more accurate analytical representation of the elastic and compressive behavior of concrete with recycled aggregates. This approach also enhances understanding of how different RAs influence the ITZ structure and, consequently, the overall material performance.