This study investigates the physico-mechanical properties, as well as the microstructural characteristics of the reactive magnesia (MgO)-activated ground granulated blast-furnace slag (GGBS) stabilized kaolin clay via a series of Na2SO4 solution soaking durability tests. For the purpose of comparison, the cement stabilized kaolin clay is selected as a control sample. The results show that the mass loss of GGBS-MgO stabilized soil is 0.25 times lower than that of PC stabilized soil soaked for 120 days. The unconfined compression strength (qu) of GGBS-MgO stabilized soil has a significant increase of as much as 20% at the early stage. Furthermore, qu of GGBS-MgO stabilized soil is 15% to 80% higher than that of PC stabilized soil. The results of X-ray diffraction analysis show that the GGBS-MgO stabilized soil has higher peak of calcium silicate hydrate (C-S-H) and lower peak of AFt relative to the PC stabilized soil. The scanning electron microscopy test shows the morphological characteristics of ettringite(AFt) in these two types of stabilized soils are different. For the PC stabilized soil, the AFt exists in the form of swelling aggregates. Unlike PC stabilized soil, the AFt of GGBS-MgO stabilized soil is in the fine small form and exists between the soil particles, which can promote the filling of large pores, leading to a higher resistance to the sulfate attack.