The use of recycled materials in roadway construction and rehabilitation can achieve significant benefits in saving natural resources, reducing energy, greenhouse gas emissions and costs. Construction and demolition waste (CDW) recycled aggregate as an alternative to natural one can enhance sustainability benefits in roadway infrastructure. The objective of this study was to quantitatively assess the life cycle economic and environmental benefits when alternative stabilized-CDW aggregates are used in pavement construction. Comparative analysis was conducted on a pavement project representative of typical construction practices in northern Italy so as to quantify such benefits. The proposed alternative sustainable construction strategies considered CDW aggregates stabilized with both cement and cement kiln dust (CKD) for the base layer of the roadway. The life cycle assessment results indicate that using CDW aggregate stabilized with CKD results in considerable cost savings and environmental benefits due to (i) lower energy consumption and emissions generation during material processing and (ii) reduction in landfill disposal. The benefits illustrated in this analysis should encourage the wider adoption of stabilized CDW aggregate in roadway construction and rehabilitation. In terms of transferability, the analysis approach suggested in this study can be used to assess the economic and environmental benefits of these and other recycled materials in roadway infrastructure elsewhere.