This research examines the utilization of air-cooled nickel slag as a partial replacement of coarse aggregate in Stone Matrix Asphalt (SMA) mixes, emphasizing its great influence on mix performance. Several amounts of nickel slag substitution were used, ranging from 0% to 100% (NS 0, NS 25, NS 50, NS 75, and NS 100), with an asphalt concentration of 6.5%. Marshall mix design testing assessed the stability, flow, and volumetric characteristics of SMA mixes (VIM, VMA). The findings showed that the use of nickel slag markedly strengthened the stability of the mix, with Marshall stability increasing from 809 kg (NS 0) to 1030 kg (NS 100), indicating improved resistance to deformation. Flow data increased in a parabolic trend, rising from 3.4 mm (NS 0) to 4.3 mm (NS 100), indicating a decrease in stiffness with increasing slag content. Volumetric analysis showed that VIM reduced with increasing slag content, decreasing from 4.017% (NS 0) to 3.184% (NS 100), indicating improved packing and reduced air voids. VMA readings showed a parabolic pattern, reaching a maximum of 20.85% at NS 25 and starting to decrease at higher slag levels. The data shows that nickel slag markedly improves the mechanical performance of SMA mixes, thus offering a viable approach to improve pavement durability and sustainability. This study highlights the feasibility of using industrial by-products such as nickel slag in road construction, which provides both economic and environmental benefits.