Exploring the interface of environmental sustainability and civil infrastructure development, this study introduces waste butter (WB), a byproduct of animal fat processing, as a novel bio-modifier in asphalt production. This approach not only recycles animal waste but also charts a course for sustainable infrastructural development, contributing to a reduced environmental impact and promoting circular economy practices. The experiments incorporated varying WB concentrations (e.g., 3%, 6%, and 9% by weight of binder) into standard AP-5 asphalt, employing advanced analytical tools for comprehensive characterization. These included thin-layer chromatography–flame ionization detection (TLC-FID), Fourier-transform infrared spectroscopy (FT-IR), scanning electron microscopy (SEM), thermogravimetric analysis (TGA), and Differential Scanning Calorimetry (DSC). The critical properties of the asphalt blends, such as penetration, softening point, viscosity, ductility, rutting factor (Dynamic Shear Rheometer), and thermal susceptibility (Penetration Index, Penetration–Viscosity Number), were assessed. FT-IR analysis indicated negligible chemical alteration with WB addition, suggesting predominantly physical interactions. TLC-FID showed a decrease in aromatic and asphaltene components but an increase in resin content, highlighting the influence of WB’s fatty acids on the asphalt’s chemical balance. The colloidal instability index (IC) confirmed enhanced stability due to WB’s high resin concentration. Meanwhile, SEM analysis revealed microstructural improvements with WB, enhancing binder compatibility. TGA demonstrated that even a minimal 3 wt. % WB addition significantly improved thermal stability, while the DSC results pointed to improved low-temperature performance, reducing brittleness in cold conditions. Rheologically, WB incorporation resulted in increased penetration and ductility, balanced by decreased viscosity and softening point, thereby demonstrating its multi-faceted utility. Thermal susceptibility tests emphasized WB’s effectiveness in cold environments, with further evaluation needed at higher temperatures. The DSR findings necessitate careful WB calibration to meet Superpave rutting standards. In conclusion, this research positions waste butter as a superior, environmentally aligned bio-additive for asphalt blends, contributing significantly to eco-friendly civil engineering practices by repurposing animal-derived waste.