The use of plastic waste can enhance the properties of asphalt binders and mixes while solving one of the most environmental-related issues. Waste plastic from milk bottles consisting mainly of high-density polyethylene (HDPE) waste was used in this research work to modify asphalt binder with two doses (2% & 4% by weight of asphalt binder). The asphalt binder's performance grade (PG) was determined and fed into AASHTOWare Pavement ME Design software to simulate pavement performance under Sharjah, UAE climate conditions. Testing results showed that adding HDPE boosted the PG from 64 to 76 and 82 for 2% and 4% dosages, respectively. AASHTOWare Simulation runs showed that 2% HDPE dosage could extend the expected service life of the asphalt pavement by 0.3 years compared to the control section, while 4% HDPE can add nearly 10.8 years to the pavement design life. Compared to the control, 2% and 4% HDPE also decreased the percentage of bottom-up cracks by 0.37% and 2.94%, respectively. When comparing the 2% and 4% HDPE-modified asphalt binders versus the control one, the failure in total permanent deformation of the 3-inch asphalt concrete (AC) pavement section was reduced by 0.03 and 0.13 inches, respectively. Adding 4% helped minimize rutting by 0.25 inches compared to the control pavement section, whereas adding 2% HDPE in the 6-inch layer increased rutting by 0.15 inches. Overall, the addition of HDPE significantly improved the performance grade and durability of the asphalt binder, extending pavement life and reducing cracks and rutting, thereby contributing to more sustainable pavement solutions.