<p>The building construction industry is presently confronting fresh challenges due to the urgent demand for green buildings worldwide. Addressing this, autoclaved aerated concrete (AAC) masonry emerges as a particularly promising solution that offers improved thermal performance, lower carbon footprint (environment friendly characteristics) and sufficient structural strength. This paper presents a comprehensive review on AAC, primarily focusing on efficient use of energy, utilization of waste material and lowering the environment impact so that the societies become more sustainable. A correlation for thermal conductivity of AAC has newly been established for a wide range of density (98—1904&#xa0;kg/m³) using the available data in literature. Additionally, a correlation between density and porosity of AAC has also been proposed for a wide range of porosity (15—88%). It is noted that the integration of phase change material (PCM) with AAC, by mixing with AAC constituent materials or PCM coating on AAC building envelope, provides improved thermal comfort and reduces power consumption for heating and cooling purposes inside the building. The previous studies have demonstrated that the utilization of waste materials in AAC preparation as a substitute of siliceous and calcareous materials has a significant potential in reducing the waste material as well as natural resource consumption, aligning with sustainable development goal (SDG 12 of United Nations). In a nutshell, this review paper serves as a roadmap, offering invaluable insights and wisdom for both practicing engineers and researchers, embarking on exploration in this specialized field.</p> Graphical abstract <p></p>