Lightweight aggregate concrete (LWAC) exhibits the advantages of thermal insulation, reduces energy consumption building costs, improves building efficiency and easy construction. Furthermore, the utilization of industrial wastes in concrete is advantageous in terms of environmental sustainability. In order to explore this, several researchers investigated the idea of integrating industrial wastes in LWAC. However, the lack of knowledge regarding the performance of industrial waste-based lightweight aggregate concrete hinders the adaptation of this concept and application of LWAC in the construction sector. Therefore, this paper summarizes the research in relation to the sustainable LWACs containing oil palm shell (OPS), lightweight expanded clay aggregate (LECA), vermiculite, perlite, pumice and sintered fly ash as lightweight aggregate, along with industrial wastes and strength-enhancing additives (viz. fibers, polymers, etc.). Firstly, desirable physical, chemical, morphological and mineralogical characterization of different lightweight aggregates are presented, and then a comprehensive overview on fresh, hardened, durability and thermal properties of LWAC incorporating industrial wastes are discussed in comparison with normal weight concrete. The review also highlights the current challenges and suggests the research gaps for further development of eco-friendly LWAC. It is concluded that vermiculite, perlite, pumice, OPS, sintered fly ash and LECA with some suitable industrial waste materials have the potential to be used in the construction sector. Moreover, LWAC with industrial waste has 50–65% lower carbon emission (kg CO2 eq/m3) in the environment. The scientific contribution of this paper provides insights into different LWACs and the knowledge base for future research and paradigm shift of using LWACs as more common alternative building materials.