The use of industrial waste in civil engineering applications constitutes a potential innovative effort to reduce environmental degradation and enable a sustainable use of natural resources. This paper reports a comprehensive laboratory study that was performed to evaluate the rubber granulates from End-of-Life Tyres (ELTs) as a lightweight backfill material in retaining walls. Various tests have been performed to provide specific information on the mechanical and physical properties of a detailed range of particle sizes smaller than 12 mm, with six different particle size distributions (S1: 0.0–0.8 mm/S2: 0.6–2.0 mm/S3: 2.0–4.0 mm/S4: 2.0–7.0 mm/S5: 90% 2.0–7.0 mm + 10% 0.6–2.0 mm/S6: 50% 2.0–7.0 mm + 50% 0.6–2.0 mm). The density and unit weight, compaction energy, compressibility, shear strength, and deformability have been evaluated to determine their performance. As a main conclusion, the research confirms that rubber granulates from ELTs possess great potential as backfill material behind retaining walls. The characteristic values of the geotechnical parameters have been estimated according to Eurocode 7. The friction angle results range from 18.27 to 23.21 degrees, and the cohesion results are wide-ranging, with values from 9.35 to 17.83 kPa. For this reason, two cantilever L-shaped retaining walls, selected as representative case studies, have been tested with these sample properties. The results of the geotechnical verifications are presented together with a comparison of the safety factors in accordance with the Spanish standard design (CTE-DB-SE-C) and the European (EC7-1) regulations. The calculations indicate that the overdesign factors (ODF) achieved in the verifications using the material properties of the S4, S5, and S6 combination improve the calculation results obtained if a conventional filler material such as sand is considered.