Sidoarjo mud is a mud that comes out from the earth's belly that continues to spurt until now, and steel slag is a waste of steel manufacturing industry. Based on previous research Sidoarjo mud can be used as cement replacement material in concrete mixture because it contains silicate (SiO 2). According to Puslitbang road and Bridge, Department of Public Works, steel slag aggregate has a high hardness cause steel slag either as pavement material. This study aims to know the effect of sidoarjo mud addition and steel slag to the characteristic of plasticity and the carrying capacity of clay. This research uses experimental method, which is an analysis based on laboratory test results, including Atterberg Limit test, Standart Proctor, Unconfined, Direct Shear, Swelling, and CBR. The soil samples come from the area around Kertajaya Indah Highway, mud from Sidoarjo, and steel slag from PT. Hanil Jaya Steel Sidoarjo. Mixed mud using concentrations of 5%, 10%, and 15%, and steel slag of 10%, 20%, and 30%. The results showed the original soil Liquid limit: 59%, Plasticity Index: 33.67%, Swelling: 3.54%, γd: 1.27 grams/cm³, qu: 0.778 kg/cm², and CBR: 3.145%, into the category of high plastic clay soil, medium swelling, very tenuous density, medium compressive strength, and bad category CBR. After addition of 15% mud and 30% steel slag, Liquid limit: 35%, Plasticity Index: 19.49%, Swelling: 0.27%, γd: 1.6 gram/cm³, qu: 2.013 kg/cm², and CBR: 8.21%, in the category of low plasticity clays, low swelling, medium density, very strong press strength, and CBR category is quite good. The addition of maximum sludge 15% and minimum 30% steel slag is effectively used as additional material for clay soil stabilization, since it can decrease the plasticity and increase the carrying capacity of soil.