Fly ash is one of the most plentiful and versatile of the industrial by-products. At present, nearly 150 million tonnes of fly ash is being generated annually in India posing dual problem of environmental pollution and difficulty in disposal. This calls for establishing strategies to use the same effectively and efficiently. However, it is only in geotechnical engineering applications such as the construction of embankments/dykes, as back fill material, as a sub-base material etc., its large-scale utilization is possible either alone or with soil. Soil stabilization can be achieved by various means such as compaction, soil replacement, chemical improvement, earth reinforcement etc. Usually, in the case of clay soils, chemical improvement is commonly most effective since it can strengthen the soil, to remove its sensitivity both to water and its subsequent stress history. Among chemical means or additives, fly ash/lime provides an economic and powerful means of improvement, as demonstrated by the significant transformation that is evident on mixing with heavy clay. In the present investigation, different percent fly ashes (10%, 20%, 40%, 60% & 80%) were added to a highly expansive soil from India by dry weight of the natural soil, and subjected to various tests. The important properties that are necessary for using fly ash in many geotechnical applications are index properties, compaction characteristics, compressibility characteristics, permeability and strength. Based on test results, it has been found that using fly ash for improvement of soils has a two-fold advantage. First, to avoid the tremendous environmental problems caused by large scale dumping of fly ash and second, to reduce the cost of stabilization of problematic/marginal soils and improving their engineering properties for safe construction of Engineering Structures.