The recycled fine aggregate (RFA) was used to replace 30% (mass fraction) of the river sand to prepare mortar. The water content of RFA was set to be 0%, 30%, 70% and 100% of the value measured under the saturated-surface-dried state, by pre-treating RFA in water. The influence of the moisture states of RFA on the properties and microstructure of mortar was experimentally investigated, by taking two types of water control methods, ie., to keep a consistent supply of mixing water and total water, respectively. Test results show that at the given mixing water supply, the fluidity of recycled mortar increase as the water content of RFA increase, and the influence of the moisture states of aggregate on the 28 d mechanical properties is insignificant. In contrast, given a consistent total water supply. The fluidity of recycled mortar decrease as the water content of RFA increase, the mortar group prepared with the oven-dried RFA present the best 28 d mechanical properties among all the mortar groups. Besides, it is found that the resistance to chloride ion ingress of recycled mortars prepared with the oven-dried RFA is the greatest among all the mortar groups, and comparable or even higher than natural mortar counterpart, regardless of the water control methods. Test results on the micro scale show that the moisture states of RFA can influence the microstructure of mortar significantly. The pre-wetting treatment of RFA led to enlarge porosity and diminished average microhardness of the new interfacial transition zones, which thereby has a negative effect on the mechanical properties and durability of mortar on the macro scale. It is suggested that the RFA at a low water content should be used to prepare the cement mortar for practical use, given that the fluidity of mortar could be ensured.