This study investigates the use of clay shale from the Settat-Khouribga region in Morocco as a sustainable substitute for sand in mortar, targeting improvements in thermal insulation, mechanical strength, and environmental impact. Mortar samples were prepared with varying clay shale contents (5%, 15%, and 25%), combined with CPJ45 cement and a 0.5 water-to-cement ratio. These samples were rigorously tested for thermal conductivity, diffusivity, specific heat, compressive strength, and flexural strength over curing periods of 1, 7, and 28 days. The findings indicate that incorporating clay shale significantly reduces the mortar's thermal conductivity, with the 25% shale content achieving the lowest thermal conductivity of 0.6 W/m· K after 28 days, making it highly effective for insulation. However, the 15% clay shale mix emerged as the optimal balance, providing both enhanced insulation and structural performance, with compressive strength reaching 18 MPa at 28 days comparable to standard mortars. Flexural strength in the 15% mix also showed stability, suggesting suitability for structural applications. Environmentally, using clay shale decreases dependence on natural sand and lowers carbon emissions associated with mortar production. This research demonstrates that clay shale-modified mortars are a viable solution for sustainable construction, particularly in regions with readily available clay shale, supporting global efforts toward greener building practices.