Effects of using small amounts of a Petrit T, a by-product of manufacture sponge iron, to modify clayey silt soil were investigated in this study. Petrit T was added at 2%, 4% and 7% of soil dry weight. A series of unconfined compressive strength tests, consistency limits tests and pH tests were conducted at 7, 14, 28, 60 and 90 days of curing periods to evaluate the physical and mechanical properties of treated soil. Results indicated improving in the unconfined compressive strength, stiffness and workability of treated soil directly after treatment and over time. Increasing in soil density and decreasing in water content were observed, with increasing Petrit T content and curing time. The pH value was immediately increasing after treatment and then gradually decreased over time. Failure mode gradually changed from plastic to brittle behavior with increasing binder content and curing time. The outcomes of this research show a promising way of using a new by-product binder to stabilize soft soils in various engineering projects in order to reduce the costs which are associated with of excavation and transportation works.