In past decade, the application of lightweight composite materials has received great attention in geotechnical engineering discipline. This paper evaluates the effect of expanded polystyrene (EPS) beads on the compressibility and lateral earth pressure of completely rounded particulates presented by virtual steel pellets. EPS beads were added to steel pellets at 0%, 0.1%, 0.2%, 0.3%, 0.4% and 0.5% by weight. A series of tall oedometer tests have been carried out to investigate the compressibility and “at rest” lateral earth pressure. Tests were conducted under five different overburden pressure (100 kPa, 150 kPa, 200 kPa, 250 kPa and 300 kPa). As well, a series of passive earth pressure tests have been conducted using a physical modelling of retaining wall in laboratory scale. The test results revealed that for a given overburden pressure, the volume compressibility and “at rest” lateral earth pressure coefficient increase as the EPS content increases. However, the internal friction angle and passive lateral earth pressure coefficient exhibited reduction by an increase of the EPS beads content.