In today's highly competitive and environmentally conscious society, finding alternative materials instead of natural resources, which are overused in construction, has become essential. The main objective of this study is to offer a sustainable alternative to cement mortars by evaluating the combined effect of partially replacing the cement in the mortar with rice husk ash (RHA) in varying proportions (4%, 8%, 12%, 16%, and 20%) and treated expanded polystyrene (EPS) in varying proportions (3%, 6%, 9%, and 12%) instead of water. A ratio of cement to sand of 1:3 and 0.5 W/C was used for the cement mortar mixture. The results showed that compared to the plain cement mortar, the mechanical performance of the modified mortar supplemented with 8% rice husk ash and 6% dissolved EPS reached the optimum replacement ratio at the 28-day mark. As the replacement ratio increased, the dry shrinkage decreased and the water absorption increased, while the thermal conductivity decreased by 24% at the highest replacement ratio of RHA and dissolved EPS. Environmental sustainability and construction requirements can be balanced by using RHA and treated EPS waste as sustainable materials to improve the properties of the cement mortar.