Large volumes of dredged sediments (DS) excavated from water reservoirs pose significant environmental and disposal challenges. This study investigates the feasibility of stabilizing DS with cement and recycled concrete powder (RCP) for use as a subbase material. A total of 25 mixtures were prepared with cement contents ranging from 3 to 10% and RCP contents from 0 to 20% by dry weight of DS. Mechanical performance was evaluated in terms of unconfined compressive strength ( \(\:{q}_{u}\) ), California Bearing Ratio (CBR), resilient modulus ( \(\:{M}_{R}\) ), and wave velocities obtained from free–free resonance (FFR) tests at different curing times. Durability was assessed through wetting–drying (W–D) cycles, while microstructural characteristics were examined using scanning electron microscopy (SEM) and energy-dispersive spectroscopy (EDS). The results indicate that cement significantly enhances the strength and stiffness of DS. Untreated DS exhibited a \(\:{q}_{u}\) of approximately 386 kPa, whereas cement-stabilized mixtures with 3–10% cement showed marked increases in strength. RCP primarily acted as a low-reactivity filler; moderate replacement levels (5–10%) maintained acceptable performance, while higher contents (≥ 15%) led to reductions in strength, stiffness, and durability due to cement dilution and increased porosity. Durability tests revealed moderate resistance to W–D cycles, with 31–51% of their original strength after three cycles. Empirical correlations between \(\:{q}_{u}\) and key engineering parameters were developed to support pavement design. The optimal mixture satisfies the Thai Department of Highways (DOH) subbase requirements and Austroads \(\:{M}_{R}\) criteria, offering a balanced solution in terms of performance, cost, and environmental impact. These findings demonstrate the technical, economic, and environmental feasibility of using cement–RCP stabilized DS as a sustainable subbase material.