Aerogel incorporated concrete (AIC) effectively improves its thermal insulation performance. However, the potential mechanical strength degradation in AIC limits its further promotion and application. Fiber reinforcement is an effective means for improving the properties of cement-based materials. However, there is currently a lack research on enhancement mechanisms involved in fiber-reinforced AIC. In this study, polyvinyl alcohol (PVA) fibers with high strength and low thermal conductivity are introduced. The influence on the properties of AIC with various lengths (6-12mm) and proportions (0-1.2wt.%) of PVA fiber was analyzed, and the mechanism of AIC enhancement was discussed based on microscopic test. The enhancing mechanism of PVA fiber on AIC was studied at microscopic scale to establish new solutions to the development of cementitious materials with both excellent load-bearing capacity and thermal insulation performance. The results revealed a synergistic effect of hydrophobic aerogel and PVA fiber on the fluidity of the mix due to the improvement of particle dispersibility and distribution uniformity. Additionally, the PVA fibers crossed aerogel particles around could inhibit crack expansion caused by aerogel fractures, thus effectively mitigating the loss of strength heat transfer with aerogel incorporation. At the same time, PVA fiber also plays a role in thermal resistance. Specifically, the incorporation of 0.6wt.% 9-mm fibers yielded the best overall reinforcement results, with an increase of 31.4% and 15.5% in flexural and compressive strengths, respectively, and a 28.5% decrease in thermal conductivity. The microstructural tests indicated that incorporating PVA fibers at 0-0.6wt.% could optimize the pore structure, reduce the porosity, and increase the water resistance of AIC. The hydration degree of the cement matrix increased due to Ca2+ adsorption by PVA fibers. This study provides an optimized design strategy incorporating PVA fibers to enhance both the physical properties, mechanical strength, and thermal insulation properties of AIC.