This paper aims at investigating the potential benefits of using new generation of reinforcement, horizontal-vertical reinforcement(H-V), to improve the bearing capacity and reduce the settlement of shallow foundations on soils. Finite element simulations of model tests were carried out to develop an understanding of influences of horizontal-vertical reinforcement on the bearing capacity, settlement, stress distribution, lateral displacement and the friction on the surface of reinforcement in horizontal-vertical reinforced soil foundation. Load-settlement response of strip footings on horizontal-vertical reinforced sand beds obtained from the numerical simulations are compared with the corresponding experimental results and the match is found to be good. The numerical simulation results show that the inclusion of horizontal-vertical reinforcement will redistribute the applied load to a wider area, thus minimizing stress concentration and achieving a more uniform stress distribution. The redistribution of stresses below the reinforced zone will result in reducing the consolidation settlement of the underlying weak sand soil, which is directly related to the induced stress. It also can be seen that the vertical inclusions of H-V reinforcement offer a strong passive resistance in the vicinity of the load, which prevents the sand particles from moving and rotating. Thus, it can be concluded that beside the tension membrane reinforcement mechanism, the vertical elements of horizontal-vertical inclusions kept the sand from being displaced under the applied load and redistributed the surcharge over a wider area. The horizontal-vertical reinforced base acts as a mattress to restrain the soil from moving upward/downward outside the loading area, redistributes the footing load over a wider area, and reduces the settlement, thereby increasing the shear strength of the composite system, which in turn substantially improves the bearing capacity of a sand bed reinforced with horizontal-vertical inclusions. In addition, failure mechanisms for horizontal-vertical reinforced soil foundations are proposed based on the finite element simulations and the results of experimental study on model footing tests conducted by the authors. Based on the beam on elastic foundation theory, vertical stress formulas that incorporate the contribution of reinforcements are then developed for horizontal-vertical reinforced foundations. The parameters such as the width, the length and the total depth of horizontal-vertical reinforcement were investigated. The predicted vertical stress values are compared with the results of finite element simulation on horizontal-vertical reinforced foundation. Good agreement is observed.