In this paper, the typical cases of subgrade separated widening project in China are summarised. The research progress of subgrade separated widening and isolating wall applications are reviewed in highway reconstruction and extension. A numerical model is established based on the PLAXIS finite element software, considering both material nonlinearity and geometric nonlinearity. The effect mechanism of the isolating wall is discussed on the settlement control of the new and existing embankment on soft ground. The effect rule of the core design parameters of the isolating wall is revealed on the settlement disturbance of the existing embankment, such as location, depth, thickness and elastic modulus, and the weight rank of the influence is analysed. The results indicate that the isolating wall effectively reduces the lateral displacement and vertical settlement of the existing embankment, and there is an optimal design location for the isolating wall. In addition, with the increase of design parameters of the isolating wall, including depth, thickness and elastic modulus, the overall settlement of the existing embankment tends to be uniform, and there are optimal values. Furthermore, the depth of isolating wall is given priority, compared to location, thickness and elastic modulus during the isolating wall design process. The research results lay a theoretical foundation for the design optimisation of the isolating wall in the separated widening project of soft ground.