Calcium carbide residue and fly ash are industrial by-products from acetylene gas industry and thermal power stations. Pavement construction has been recognized as a platform to utilize huge quantities of these waste materials for soil stabilization. An attempt has been made, in this paper, to evaluate the potential of a binder that consists of calcium carbide residue and fly ash to improve the engineering behavior of an expansive soil. The role of curing period and different percentages of these binder contents on Atterberg limits, compaction characteristics, strength, and mineralogical and morphological behavior has been examined. The index properties such as Atterberg limits and compaction characteristics have improved considerably. Significant improvement in the strength properties such as unconfined compressive strength and California bearing ratio has been observed with the addition of calcium carbide residue up to 8%. The binder content prepared with 10% calcium carbide residue and 6% fly ash obtained 18-fold enhancement in California Bearing Ratio (CBR) value and 16-fold enhancement in unconfined compressive strength (UCS). This is attributed to the formation of calcium based minerals formed as a result of a chemical reaction between the soil and binder, which were evidenced from mineralogical and morphological studies. From this experimental investigation, it can be concluded that the binder prepared with calcium carbide residue and fly ash is well suited for stabilization of expansive soils. © 2018 University of Kuwait. All rights reserved.