Shrinkage is a crucial property of hardened concrete that significantly impacts the long-term performance and lifespan of concrete structures. Both drying and autogenous shrinkage contribute to the development of internal stresses, potentially leading to cracking and reduced structural integrity. Drying shrinkage, caused by the loss of free and absorbed water, can lead to cracks that allow harmful materials to enter, compromising the compressive strength and durability of concrete. This study explores how the addition of fly ash (FA), ground granulated blast furnace slag (GGBFS), silica fume (SF), and metakaolin (MK) as supplementary cementitious materials (SCMs) impacts the mechanical properties and shrinkage behaviour of medium-performance concretes. A total of 13 different concrete mixes were prepared, with three replacement levels for each SCM, to investigate their influence on shrinkage, as well as on compressive, flexural, and splitting tensile strength. Shrinkage tests were carried out in accordance with ASTM standards, while mechanical properties were assessed based on IS code standards. It is well-established that supplementary cementitious materials (SCMs), especially when used with low water-to-binder (w/b) ratios, tend to increase shrinkage. However, their impact on microcracking and long-term durability remains less understood. The findings of this study revealed that metakaolin (MK) and silica fume (SF) had a significant influence on both the mechanical properties and shrinkage behaviour of the concrete. Additionally, the use of fly ash and slag mixes showed an improvement of almost 25–30% in reducing the shrinkage strains. Specifically, these materials were found to significantly reduce shrinkage-related cracking under extreme drying conditions, although they also contributed to increased mechanical properties. Using supplementary cementitious materials (SCMs) in concrete production can improve sustainability but may also lead to shrinkage challenges. This research enhances the understanding of shrinkage mechanisms in SCM-incorporated concretes and provides insights for optimizing mix designs to improve sustainability and structural performance in concrete technology.