In this study, recycled fine aggregates (RA) were successfully adopted to produce strain-hardening cementitious composites with a compressive strength of over 120 MPa. A multiple-scale investigation was conducted to study the tensile performance and cracking mechanism of the developed cement-based composites. Compared to the fine silica sand-based counterpart, significantly higher tensile strain capacity (>5%), more distinguished multiple cracking, and smaller average crack width (<100 μm) were achieved in RA-based strain-hardening cementitious composites. Supported by microscopic and mesoscopic results, the old mortar of RA with loose microstructures and weak RA/matrix interfaces were found to work as “additional flaws” in the matrix, which effectively tailored the distribution of active flaws and promoted multiple cracking behavior. In addition, the developed RA-based composites presented higher sustainability and lower material costs compared to fine silica sand-based ones. This study provides a new avenue for the upcycling of construction wastes in developing greener high-performance fiber-reinforced cementitious composites.