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Abstract Fayalite slag (FS) is an Fe‐rich nonferrous metallurgy (CaO‐MgO‐) FeOx‐SiO2 slag originating from nickel or copper manufacturing processes, which currently is disposed to landfills or used in low‐value applications. This study investigates the mineralogy and glass content of certain sized fractions of FS and how it influences the reactivity, mechanical, and microstructural properties of the alkali‐activated materials produced. Water‐quenched granular FS was sieved into two size fractions: namely, a fine fraction (FF) with a particle size range of 0–0.5 mm and a coarse fraction (CF) with a particle size range of 1.5–2 mm. It was then milled to a similar median particle size of 10 μm to be used as a binder precursor. The reaction kinetics of each fraction was determined via thermal analysis microcalorimeter, and the microstructural evolution and chemical composition of the binder were studied using a scanning electron microscope coupled with an energy dispersive X‐ray spectroscopy. The environmental leaching behavior of both fractions before and after alkali activation was assessed according to the EN 12457‐2 standard. The results showed that both fractions consisted of fayalite, magnetite crystalline phases, and MgO‐SiO2‐FeOx (‐CaO‐Al2O3) glass phase. However, FF had a higher glass content (63 wt.%) in comparison to CF (39 wt.%), and, consequently, FF was more reactive under alkali activation, as evidenced by faster reaction kinetics, faster strength development, and improved microstructural properties. Alkali‐activated samples had differences in the chemical compositions of their binder gels at early stages, though later, their binders became increasingly homogenous and consisted of an Na‐K‐Fe‐Si gel with Mg, Ca, and Al as minor constituents in both samples. Additionally, the leaching behavior of potentially toxic metals and substances from precursors and alkali‐activated samples prepared was below the limits set for paved structures as specified by Finnish legislation.