<p>The high cost of road construction, particularly when built on weak subgrade soils like clay, has driven the need for effective economic stabilization methods. This study proposes a potentially cost-effective method for subgrade stabilization, as evidenced by controlled laboratory tests by utilizing locally available fly ash and lime to stabilize clayey soil, resulting in an estimated cost saving of 20.8% per kilometer of pavement construction. The reduced pavement thickness, made possible by improving the strength characteristics of the subgrade, significantly lowers the quantity of required materials, labor, and overall project expenses. Clayey soils, due to their swelling, shrinkage, and compressibility behaviors with changes in moisture content, are unsuitable for supporting rail and road embankments in their natural state. To overcome these limitations, this study investigated the stabilization potential of fly ash and lime. A series of laboratory tests including Atterberg limits, standard Proctor compaction, California Bearing Ratio (CBR), triaxial shear, and resilient modulus tests were conducted to evaluate performance improvements. Using CBR tests, varying lime contents (1% to 6%) were initially added to the clay to determine the optimal lime percentage. The optimal lime content was found to be 4%. Subsequently, fly ash was added in proportions ranging from 5% to 30% to the clay-lime (4%) mix, leading to an optimal fly ash content of 20%. The final optimized mix (76% clay + 4% lime + 20% fly ash) exhibited a 205% increase in CBR and a 34% rise in shear strength compared to untreated clay. This strength enhancement translated into a reduction in required pavement thickness, contributing to substantial cost savings. In addition to improving soil performance and reducing construction costs, this approach promotes environmental sustainability by utilizing industrial waste (fly ash), thus addressing both economic and ecological concerns in infrastructure development. </p>