Clay soils pose significant challenges in geotechnical engineering due to their inherently low bearing capacity, pronounced shrink–swell behavior, and high sensitivity to moisture variations. In this study, lime was combined with sodium silicate waste (SSW) to provide a sustainable and cost-effective stabilization technique aimed at improving the engineering performance of clayey soils. The key objectives were to minimize lime usage, enhance mechanical strength, and valorize an industrial byproduct with high pozzolanic reactivity. The SSW employed contained reactive mineral phases such as analcime, gehlenite, anorthite, and calcite, which, under the alkaline environment created by lime hydration, participated in chemical reactions forming cementitious compounds including calcium silicate hydrate (C–S–H) and calcium aluminosilicate hydrate (C–A–S–H). Laboratory investigations—comprising unconfined compressive strength (UCS), Atterberg limits, and compaction tests—demonstrated that incorporating SSW not only synergistically increased soil strength but also reduced plasticity indices and improved compaction behavior. Microstructural observations using scanning electron microscopy (SEM) confirmed the formation of dense gel networks and new cementitious phases at soil particle interfaces, validating the underlying stabilization mechanisms. Beyond technical benefits, the reuse of this industrial waste substantially decreased lime demand and associated CO₂ emissions, offering an environmentally responsible solution for waste management. Overall, the results highlight lime–SSW stabilization as a sustainable, efficient, and practical strategy for treating problematic clay soils in geotechnical applications.