This study investigates the thermal and mechanical properties of cement composites reinforced with recycled polyurethane (PU), aiming to develop sustainable insulation materials for building applications. Composites were made through the incorporation of recycled PU at various mass fractions (7.5%, 15%, 22.5%, 30%, and 40%). Microstructural analysis using scanning electron microscopy (SEM) and X-ray diffraction (XRD) revealed a cellular structure and a crystallinity index of 79.53% confirming the semi-crystalline nature of the matrix. Thermal measurements indicated a substantial improvement in insulation performance, with thermal conductivity decreasing from 0.16 W·m−1·K−1 in the reference sample to 0.082 W·m−1·K−1 at 40% PU content representing a reduction of approximately 49%. Although mechanical testing revealed a significant decline in both compressive and flexural strength with increasing fiber volume fraction (Vf), The unreinforced matrix exhibited the highest compressive (14 MPa) and flexural (5.2 MPa) strengths, while composites with 40% PU showed reductions to 4 MPa and 1.5 MPa, respectively. The results highlight the potential of polyurethane-reinforced composites as lightweight, thermally efficient materials for construction offering a sustainable solution for industrial waste recycling.