Fly ash is a waste material obtained from burning of coal in thermal power plants. Coal consumption is still very high and is expected to remain above 38% globally. Therefore, large volumes of fly ash are produced every year that need to be managed as waste. Improper disposal of fly ash can lead to surface water and ground water pollution and adversely affect human health and environment. The use of fly ash as an agent to stabilize soil has recently become popular in geotechnical engineering due to its many benefits such as being eco-friendly and cost-effective, and improving the geotechnical characteristics of the soil. This paper presents a review of the geotechnical properties of fly ash-stabilized fine-grained soils. Several features of fly ash, including classification, physical, geotechnical, chemical, and mineralogical properties, health concerns, disposal, availability, and cost are analyzed. The effects of fly ash in improving a wide range of mechanical properties of soils including unconfined compressive strength, shear strength, CBR value, consolidation and/or swelling characteristics, and permeability are reviewed in detail. It is shown that fly ash can be a substitute material for use in soil stabilization, leading to substantial economic and environmental benefits.