The concept of sustainability is widely being implemented in various engineering applications and the use of eco-friendly alternatives is encouraged to replace traditional materials to gain significant, often overlooked positive environmental impacts. This study examines the feasibility of using natural alternatives such as bioenzyme (TerraZyme) and biopolymer (Xanthan gum) to enhance the strength of sands by bio-cementation. Although sand is chemically inert, it often encounters problems like stiffness reduction, settlement, erosion, and earthquake-induced liquefaction under various loading conditions. The study investigates the stress–strain behavior of sand influenced by TerraZyme and Xanthan gum and discovers the key role of a minimal Kaolin content in the treatment. Results from a set of static triaxial tests on treated soil samples showed that both additives significantly improved the strength of sand within 30 days of curing. TerraZyme modifies the elemental structure of sand–Kaolin mixtures, whereas Xanthan gum acts mainly through weak binding by altering the soil matrix. Further, comprehensive chemical and microstructural analyses including Environmental Scanning Electron Microscopy (ESEM), Energy-Dispersive X-ray Spectroscopy (EDS), high-resolution powder X-ray diffraction (XRD) analysis, Fourier Transform Infrared Spectroscopy (FTIR), and Solid-state Nuclear Magnetic Resonance (NMR) spectroscopy were carried out to understand the microstructural and chemical interactions at different scales that are responsible for the improvement. These analyses revealed that the alumina in Kaolin is the primary reason for better bonding through chemical interactions, while Xanthan gum serves just as a physical binder. The findings indicate that besides the additive type, the presence of Kaolin and its reactivity play a critical role in strength improvement. This study provides significant confidence on the use of these eco-friendly substitutes as a replacement for traditional additives like cement and lime in ground improvement applications, thereby lowering the environmental impact.