This paper aims to study the suitability of fully replacing cement by sodium carbonate activated slag in producing autoclaved aerated concrete (AAC). The material properties of the product are characterized in terms of green strength development, mechanical properties, pore related properties such as porosity and thermal conductivity, shrinkage and reaction products. The produced alkali-activated slag-based AAC (ASAAC) shows comparable material properties to the designed cement-based reference AAC samples by giving a compressive strength of −25% with raw density of +18%, thermal conductivity of +13% with a porosity of −5% and drying shrinkage of +5.5%. Besides, a relatively higher crystallinity of calcium silicate hydrates and Al incorporation in the chain of C-S-H is observed for ASAAC products. Furthermore, significant reductions in cost, energy consumption and CO2 emission are foreseen.