The increasing production of bottom ash (BA) from municipal waste incineration remains underutilized, thereby increasing the burden on the environment. To save natural resources and achieve resource recycling, this study uses BA powder (60 %) and slag (40 %) as alkali-activated raw materials to completely replace cement, producing alkali-activated bottom ash-slag concrete (AABA-SC). Additionally, the study examines the use of waste incineration BA with a particle size of <4.75 mm to replace natural fine aggregate at rates of 25 %, 50 %, 75 %, and 100 % to determine the optimal replacement rate. The optimal replacement rate of waste incineration BA was determined by evaluating mechanical properties, microstructure, and durability (drying shrinkage, freeze-thaw resistance, sulfate erosion resistance, and heavy metal leaching tests) to maximize its utilization. Finally, production recommendations for the practical engineering application of BA are provided. The study results indicated that the mechanical strength of AABA-SC was optimal at a 50 % replacement rate of bottom ash fine aggregate (BAFA). The 28-day compressive strength, flexural strength, and splitting tensile strength reached 43.2 MPa, 7.3 MPa, and 3.0 MPa, respectively. At this replacement rate, AABA-SC exhibited the lowest heavy metal leaching rate and the strongest resistance to sulphate erosion and freeze-thawing, with strength loss rates differing by 1.7 % and 0.60 %, respectively, compared to natural concrete. This optimization is attributed to the synergistic effect between BAFA and natural fine aggregate, resulting in a denser microstructure. The drying shrinkage of AABA-SC decreased significantly with increasing BAFA replacement. Of particular note, the 28-day compressive strength (at 100 % replacement) and flexural strength (at 75 % replacement) of AABA-SC were 8.3 % and 3.0 % higher than those of natural concrete, respectively. However, the splitting tensile strength was generally weaker than that of natural concrete. Additionally, a significant amount of BAFA increases the porosity of AABA-SC and promotes the generation of CaCO3.