Increasing the bearing capacity of shallow foundations is a significant challenge in the urban environment due to increased population growth. This paper presents the bearing capacity of circular foundations encircled by a diaphragm wall. In this study, the effects of diaphragm wall depth (0.5 D, D, 2 D) (D is the foundation diameter) of the foundation on the bearing capacity of the foundation are investigated. Varying relative densities of sand soil (loose, medium, and dense) are utilized. The results of the experimental tests show that the diaphragm wall possesses an influence upon the settlement and the foundation bearing capacity. Where, the capacity of bearing increased as the diaphragm wall depth increased. On the other side, increasing the depth leads to a decrease in the settlement ratio of about 57%. The results of experimental work also demonstrated that the best depth is between D and 2D for all types of relative densities.