The conventional soil stabilization methods using additives such as cement and lime are losing scope owing to their non-environment-friendly nature. This inspires the use of industrial by-products in soil modification for sustainable development. This paper presents the results of an extensive laboratory investigation on mechanical properties of fiber reinforced Karewa soil stabilized with cement kiln dust (CKD). A total of 11 groups of samples were prepared at four different percentages of glass fiber (i.e., 0.3%, 0.6%, 0.9% and 1.2%) and three percentages of CKD (i.e., 7%, 14% and 21%) each by dry unit weight of soil. For determination of optimum soil–CKD–fiber mixes, standard proctor compaction and pH tests were conducted. The strength improvement was evaluated by performing unconfined compression strength and split tensile strength tests after curing of 7, 14 and 28 days. The stress–strain patterns of fiber reinforced and CKD-treated samples displayed strain hardening and strain softening characteristics, respectively. The strength test results revealed an improvement of 9.6 times as that of untreated soil at CKD content of 14% and fiber content 0.9%. The technical benefits of combining two ground improvement techniques (chemical stabilization and fiber reinforcement) are evident in the present study. The formation of cementitious products due to CKD-addition was affirmed through XRD spectroscopy. Microstructural analysis was conducted using field emission scanning electron microscopy and an apparent change in pore volume distribution was observed, with both size and amount of micro and macropores considerably reduced signifying increased number of particle contacts per unit volume.