Municipal solid waste incineration (MSWI) bottom ash (BA) is widely available and has been increasingly explored for sustainable concrete production. While it is commonly used in Ordinary Portland Cement (OPC)-based concrete, its application in alkali-activated concrete (AAC) remains rare. This study developed a new AAC using MSWI BA as coarse aggregate to evaluate whether this represents a more sustainable application pathway compared to its use in conventional concrete. To address issues associated with metallic aluminum (Al) in MSWI BA, a NaOH-based pre-treatment was applied to reduce its content and minimize surface cracking and volume expansion in AAC. The incorporation of treated MSWI BA increased the overall porosity of AAC. The interfacial transition zone (ITZ) surrounding MSWI BA exhibited characteristic microstructural features. While previous studies suggested that MSWI BA-induced porosity may enhance freeze-thaw resistance in OPC concrete, the opposite trend was observed in AAC. The increased pore volume, irregular pore shapes, and MSWI BA-related microcracking reduced freeze-thaw durability. Despite these challenges, the developed AAC retained mechanical performance within strength class C30/37 and achieved a substantially lower carbon footprint compared to OPC and CEM III/B concretes. Leaching assessments further confirmed that the developed AAC complied with environmental standards and did not release harmful contaminants. Overall, these findings demonstrate that MSWI BA is a promising coarse aggregate for AAC.