As a typical multi-phase composite, the permeable cement-treated recycled aggregate base material (CRAM) faces critical technical challenge in balancing mechanical properties with ecological functionalities. To tackle the challenge, this study aimed to explore the meso-scale fracture and damage mechanisms of CRAMs via peridynamics (PD), providing valuable insights into and theoretical recommendations for the optimal design of CRAMs towards potential engineering applications. A mesoscopic heterogeneous numerical model of CRAMs was thus established, featuring the realistic consideration of the controllable pore structures and random aggregate distribution. The multi-scale damage mechanisms of CRAMs subjected to unconfined uniaxial compression were investigated, whereas the effects of porosity, interfacial transition zone (ITZ) properties, and the content of recycled aggregates on the unconfined compressive strength and fracture behavior of the CRAM specimens were further analyzed. The results show that the PD theory can accurately simulate the interactions within the CRAM specimens and naturally capture the initiation and propagation of cracks. The effective yield strength, ultimate compressive strength, and effective modulus of CRAM specimens all positively correlate with the matrix filling ratio Sm, with the ultimate compressive strength showing a clear linear relationship with Sm. A significant turning point in the failure mode of the specimens occurs within Sm=0.76–0.88, transitioning from pronounced aggregate crushing to cement matrix failure. The interface characteristics mainly affect the effective yield strength of the specimens: as the interface is enhanced, the effective yield strength increases, and the failure mode of the specimens gradually changes from interface debonding to ductile fracture of the cement matrix. As the replacement rate of recycled aggregates increases, the breakage of recycled aggregates becomes more severe, particularly for the recycled red brick aggregates, resulting in a decrease in the overall compressive strength and fracture performance of the CRAM specimens. In view of the impacts of these factors, the following technical measures were recommended to ensure higher strength of the CRAMs: the mixing and molding processes should be improved to enhance the homogeneity of the mixture, as the spatial distribution of aggregates and pores significantly influences the internal stress state of the specimens and ultimately the fracture performance of the mixture; furthermore, the proportion of red bricks in recycled aggregates should be minimized to limit the excessive breakage of aggregates.