Bio-sourced compressed earth blocks (B-CEB) were manufactured with raw soil material and peanut shells powder to produce building material with feeble environmental impact and better mechanical and hydric performances. The objective of this work is to add value to two local natural raw materials namely earth and peanut shell in the production of B-CEB with low thermal conductivity, better water resistance, and better mechanical strength. Mineralogical studies (by XRD, DTA-TG), chemical and geotechnical studies (Atterberg limits, particle size distribution) carried out on this clay have shown that it is composed of kaolinite (40 wt.%), muscovite (8 wt.%), quartz (34 wt.%), and goethite (10 wt.%). It is a sandy-silty clay of medium plasticity containing no swelling minerals. Its particles are mainly clay (50 wt%), silt (32 wt%), fine and coarse sand (18 wt%). The clay raw material used in this study is referenced BAM. The peanut shells powder, used in range of 10 to 40 wt.% to improve the raw soil, mainly contains the cellulose type I. The apparent density of B-CEB decreases when the peanut shells content increases. By contrast, the porosity increases and was greatly affect by the addition of peanut shells powder. With 20 wt.% of peanut shells powder the porosity of B-CEB increase about 67% compared to the porosity of the reference (untreated B-CEB). Mechanical properties were enhanced with peanut shell content between 15 to 25 wt.% and reached the maximum with 20 wt.%. The B-CEB becomes more ductile when the peanut shells content increases. All the elaborated B-CEB, except the B40, are in the category of the construction of load-bearing wall which is characterized by the strength higher than 4 MPa. With 15 to 30 wt.% of peanut shells powder, the resistance of B-CEB to rain erosion was enhanced. With 30 wt.% of peanut shells powder, thermal conductivity was reduced by about 43% compared with untreated B-CEB. Given the improvement of different properties, the peanut shells powder can be used in the range of 15 to 25 wt.% to stabilize the B-CEB for the construction of habitats with better durability and thermal comfort.