In recent time, the practice of sustainable construction and provision for affordable housing has been a major discussion in many developing countries. Palm Kernel Shell (PKS) and laterite are locally sourced materials. The former being an agro-industrial waste obtained from the oil palm seed, while the latter is readily available in large quantities in the region with heavy rainfall. In this paper, the performance of concrete made with PKS (as a replacement for coarse aggregate), and laterite (as a partial replacement for fine aggregates) was investigated. The workability, compressive strength, splitting tensile strength, and water absorption of concrete mixes made with PKS and laterite at 10, 20, and 30% replacement level were evaluated. The concrete specimens were also exposed to 1.0 N of NaOH solution and thereafter tested for compressive and tensile strength. The response of the concrete in this aggressive environment was evaluated. Test results reveal that the concrete mixtures with only partial replacement of PKS show better workability compared to the control mixture or mixture containing laterite. The mechanical properties generally decreased as percentage content of PKS and laterite were increased in the mix. It can be concluded that concrete mixtures with the percentage of PKS and laterite at 20% or less could be considered in concrete production, serving as an alternative to the conventional concrete. At this dosage level, concrete made with these two locally sourced materials can be produced at low cost and reducing the adverse effect of these waste materials.