A B S T R A C TThe demand for land in conjunction to infrastructure development is become crucial and expensive. In the near future, a problematic soil such as peat is becoming a final alternative. In crucial cases, peat land cannot be avoided and has been hosted for engineering structures (e.g., road, highway, railway and bridge). Peat soil is well established of its downgraded characteristics, highly compressibility and low in shear strength. This study aimed to investigate effect of fly ash and gypsum on the mechanical properties of peat soil. Fly Ash (FA) is a by-product material that is generated from the burning of coal in thermal power plants. In this study, gypsum was prepared chemically in the laboratory to simulate residue from Neutralization Underflow Process (NUF). For the first batch of samples, the peat samples were initially treated with Synthetic Gypsum (SG) in the ranges between 0 and 20% of sample dried weight (SG treated soil). In a second batch, the peat samples were prepared with 10% FA and then mixed thoroughly with different amounts of SG contents (0, 5, 10 and 20%) (10FA-SG treated soil). The results showed that soil treated with mixture of 10% FA and SG indicated lower liquid limit values than the SG treated soil. In compaction tests, the maximum dry density of both increased in both SG treated soil and FA-SG treated soil. The permeability of SG treated soil increased with the increases in SG contents. Similarly, occurred to permeability of FA-SG treated soil however, its values are lower than the soil treated without FA. Shear strength of SG treated showed decreased with increasing amount of SG content. In contrast, the FA-SG treated soil exhibited higher strength if compared to that of SG treated soil. The result suggested that the application of FA and SG mixture is more effective in stabilization in mechanical strength and densification of peat soil than the use of SG only.