In order to reduce the brittleness of soil stabilized by lime only, a recent study of a newly proposed mixture of polypropylene fibre and lime for ground improvement is described and reported in the paper. To investigate and understand the influence of the mixture of polypropylene fibre and lime on the engineering properties of a clayey soil, nine groups of treated soil specimens were prepared and tested at three different percentages of fibre content (i.e. 0.05%, 0.15%, 0.25% by weight of the parent soil) and three different percentages of lime (i.e. 2%, 5%, 8% by weight of the parent soil). These treated specimens were subjected to unconfined compression, direct shear, swelling and shrinkage tests. Through scanning electron microscopy (SEM) analysis of the specimens after shearing, the improving mechanisms of polypropylene fibre and lime in the soil were discussed and the observed test results were explained. It was found that fibre content, lime content and curing duration had significant influence on the engineering properties of the fibre–lime treated soil. An increase in lime content resulted in an initial increase followed by a slight decrease in unconfined compressive strength, cohesion and angle of internal friction of the clayey soil. On the other hand, an increase in lime content led to a reduction of swelling and shrinkage potential. However, an increase in fibre content caused an increase in strength and shrinkage potential but brought on the reduction of swelling potential. An increase in curing duration improved the unconfined compressive strength and shear strength parameters of the stabilized soil significantly. Based on the SEM analysis, it was found that the presence of fibre contributed to physical interaction between fibre and soil whereas the use of lime produced chemical reaction between lime and soil and changed soil fabric significantly.