The collapsible loess will rapidly soften and lose its bearing capacity when soaked in water. Under a mild condition (20 °C), the biomimetic inorganic agent, diammonium phosphate (DAP), reacts with calcite in the collapsible loess, producing a stronger bonding material, hydroxyapatite (HAP), to modify and stabilize the soil. Uniaxial compression, permeability tests, and morphological analysis using X-ray diffraction and scanning electron microscopy equipped with an energy X-ray dispersive system were used to assess the effectiveness of DAP stabilization on the collapsible loess. The results indicated that HAP improved the inter-particle bonding within the loess, filled the pores within particles, reduced the permeability, and consequently mitigated the collapsibility of the loess. The compressive strength of the DAP-treated loess increased as DAP concentration increased. Following 28 days of curing, the compressive strength of the loess treated with a 3.0 mol/L DAP solution was six times greater than that of the untreated group. DAP’s reinforcement effect on the loess was superior to that of cement. The compressive strength of the DAP-treated loess was about double that of the cement-treated loess and the permeability coefficient was reduced by more than 50% at equivalent solid content. Furthermore, DAP generated 82% fewer carbon emissions compared to Portland cement. Considering eco-friendly and sustainable development, DAP offers a more competitive alternative for modification and stabilization of loess.