This article reports the results of an investigation on the microstructure related characteristics and compressive strength of OPC matrix incorporating an activated local by-product slag that cooled by either water or air. Both types of slag (water-cooled slag (WCS) and air-cooled slag (ACS)) were mechanically activated through definite grinding procedures to produce a slag with various finenesses (0.5, 2.0 and 3.3 m2/g). The impacts of mechanical activation extent (fineness) and content of either WCS or ACS on the nature and amount of hydration products, capillary porosity, sorptivity and compressive strength of OPC mortars were examined and then compared, using thermo-gravimetric analysis, de-sorption, sorptivity and compressive strength approaches, respectively. Thirteen cement paste mixes and thirteen OPC mortar mixes were therefore prepared, using different slag contents (0, 20, 35 and 50%, by mass of OPC). The mechanical activation of the local by-products slag had led to significant improvements in the microstructure, sorptivity and compressive strength of OPC matrix. These improvements are mainly dependent on the content of slag. It was found that the proper content of WCS or ACS to be considered in OPC mixes was about 20%, by cement mass. It also suggested that cooling of local slag using water is more appropriate approach than cooling of slag in air. However, ACS could be utilized in concrete mixes after considering a careful and an effective activation program.