The subgrade soil of western by Pass Road Mardan, Pakistan consists of silty clay belonging to A-6(14) group of the AASHTO soil classification system. The average natural moisture content of the soil is more than 18% which makes it susceptible to water logging and problematic for pavement construction. The aim of this research is to improve the supporting power of the existing subgrade material to carry the proposed traffic safely. For this purpose, lime was incorporated into the soil. Soil samples were prepared containing 0, 4, 6, 8, 10 and 12% lime by weight of the soil. Laboratory tests were conducted for determining particle size distribution, Atterberg limits, optimum moisture contents and maximum dry density and California Bearing Ratio (CBR). From this study it was found that the CBR initially increased with increase in lime content, reaching to a maximum value (35.50 %) at 6% lime content and then decreased with further increase in lime content. The optimum lime content for CBR was found as 6.50% (w/w), which enhanced CBR value by 337% compared to control. A consistent decrease from 1.92 at 0 to 1.763 (g/cm3) at 12% lime was observed suggesting compaction in the material. Results suggested that liming subgrade material is a viable option for improving pavement.