Black cotton soil, notorious for its high swelling and shrinkage properties, poses challenges in construction and infrastructure development. This study explores the impact of using the biopolymer xanthan gum to enhance the soil stability of black cotton. The interaction mechanisms between xanthan gum and high-plastic clay were investigated through comprehensive laboratory testing under various xanthan gum content (0%, 0.5%, 1%, 1.5%, and 2%) for a range of laboratory tests, including Atterberg’s limits, free swell index, Indian standard heavy compaction test, and unconfined compressive strength (UCS), to evaluate the mechanical behavior of both natural and treated soils. Additionally, microscale tests such as scanning electron microscopy (SEM) and X-ray diffraction (XRD) were conducted to scrutinize microscopic alterations in the treated soil. The findings of this research contribute valuable insights into the use of xanthan gum as an eco-friendly remedy for stabilizing black cotton soil, offering a sustainable method for enhancing soils in geotechnical applications.