Diatomaceous soils, composed of diatom microfossils with biological origins, have geotechnical properties that are fundamentally different from those of conventional non-diatomaceous fine-grained soils. Despite their high fines content, diatomaceous soils typically exhibit remarkably high shear resistance, approaching that of sandy soils. However, the exact role that diatoms play in controlling the mechanical properties of fine-grained soils and the underlying mechanisms remain unclear. In light of this, the shear strength response of diatomaceous soils was systematically investigated using consolidated undrained triaxial compression tests on diatom–kaolin mixtures (DKMs) with various diatom contents and overconsolidation ratios. The micro- and nano-scale structures of the soil samples were characterized in detail using scanning electron microscope (SEM) and atomic force microscope (AFM) to interpret the abnormal shear strength parameters of diatomaceous soils. The results indicated that the presence of diatoms could contribute to significantly higher strength, e.g. the friction angle of DKMs was improved by 72.7% to 37° and the value of undrained shear strength tripled with diatom content increasing from 20% to 100%. Such significant improvement in soil strength with diatom inclusion could be attribute to the hard siliceous skeleton of diatoms and the interlocking between particles with rough surfaces, which were quantitatively analyzed by the surface roughness parameters with AFM. Furthermore, a conceptual model established based on the macro-mechanical tests and microscopic observations portrays a microstructural evolution of soils with increasing diatoms. The microstructure of soils was gradually transformed from the matrix-type to the skeletal one, resulting in a continual augmentation in shear strength through mutual interactions between diatom microfossils. This paper provides new insights into the multi-scale structural properties of diatoms and significantly advances our understanding of the mechanical behavior of diatomaceous soils.