This study explores the potential of stabilized granular lateritic soil as a viable alternative to high-quality aggregates in pavement layers. Laboratory studies were carried out to thoroughly evaluate the strength and long-term durability qualities of stabilized lateritic soil with various cement contents. Notably, increasing the cement content to 3% resulted in a remarkable threefold increase in unconfined compression strength compared to untreated samples. Moreover, significant improvements were experimentally observed in soaked California Bearing Ratio and indirect tensile strength, highlighting the effectiveness of stabilization. Long-term durability was rigorously evaluated through wetting–drying (W-D) cycles, revealing that the stabilized soil met established performance criteria. This confirms its suitability for use in both low and high-volume road construction projects. These findings underscore the improved material performance achievable through proper stabilization techniques. In conjunction with existing literature, this study supports the ongoing research and development of cost-effective and durable road construction materials utilizing locally available resources. By leveraging stabilized lateritic soil, infrastructure projects can potentially reduce dependency on scarce high-quality aggregates, mitigate environmental impacts associated with aggregate mining and transport, and promote sustainable construction practices.