This research evaluated the impact of incorporating waste polystyrene (PS) in bitumen-binder modification for sustainable asphalt, with replacement levels ranging from 5% to 50% by weight. Rice husk ash (RHA) was used as a filler, and de-silted sand served as the fine aggregate, while crushed granite was employed as the coarse aggregate. Various tests, including penetration, viscosity, flash point, fire point, specific gravity, ductility, and the Marshall stability test, were conducted on the asphalt binder. The modified binder's penetration, ductility, viscosity, and specific gravity decreased with increasing PS content, whereas the flash and fire points increased. Stability testing showed that at 10% PS content, the asphalt had properties suitable for heavy traffic (wearing course), with stability, flow, density, air voids, voids in mineral aggregates (VMA), and voids filled with bitumen (VFB) values of 6825 N, 3.33 mm, 2.362 g cm−3, 4.52%, 18.21%, and 75.18%, respectively. Within the 15%–45% PS content range, the modified asphalt met the criteria for medium traffic (binder course). FTIR and SEM analyses confirmed the successful synthesis of PS-modified asphalt, revealing the encapsulation of PS microspheres on the binder’s surface, forming a composite network structure in the asphalt. The study concluded that this modified asphalt, derived from waste materials, could be effectively utilized in constructing asphalt pavement courses. These findings indicate the potential for the developed modified asphalt to serve as an economical road surfacing material while addressing pollution and environmental concerns associated with waste.