Understanding the mechanical properties and failure process of cemented paste backfill with recycled rubber (RCPB) is the foundation of backfill design in underground mining. In this study, physical and mechanical tests were conducted on RCPB to obtain its mechanical property parameters, such as its uniaxial compressive strength (UCS), toughness, and peak strain. The influence of the rubber dosage on the mechanical properties of RCPB was also analyzed. In addition, the deformation behavior, fracture development, and failure process of RCPB with different rubber contents were observed using the digital image correlation (DIC) technique. The experimental results suggested that, although the UCS of RCPB is reduced as more rubber is added, its toughness and ability to absorb energy is increased. Moreover, the impact resistance of RCPB is improved by this increased toughness. With the increase in the rubber content, the deformation corresponding to the plastic yield stage of RCPB increased, which resulted in better ductility and improved impact resistance. The failure of the RCPB specimens mainly showed an “X” shape. The results of this study help us to better understand the mechanical behavior of RCPB after backfilling underground.