This study explored and analyzed the potential of the practical use of acid mine drainage-treated sludge (AMDS) as a new soil stabilizer for arsenic (As) and heavy metals. Various analyses, toxicity evaluations, and extraction batch experiments were performed to investigate the characteristics of the AMDS as a soil stabilizer and to identify the main mechanisms to fix As and heavy metals on the AMDS in soil. Two types of AMDS, copper metal mine drainage-treated sludge (MMDS) and coal mine drainage-treated sludge (CMDS) and four contaminated soils with different pollution scenarios were used in the experiments. ‘Soil A’ and ‘Soil D’ were mainly contaminated with Cd, Pb and Zn. ‘Soil B’ and ‘Soil C’ were contaminated with As. Results from XRD, XRF, SEM-EDS, TG-DTA, and BET analyses suggested that AMDS is mainly composed of Fe- and Ca- bearing minerals such as CaCO3, Ca(OH)2 and amorphous Fe-oxide (hydroxide), which have a large surface area and high adsorption capacity for As and heavy metals. From batch extraction experiments, the Pb stabilization efficiency of both of the AMDSs in soil A, which has a high Pb and Zn content, was higher than 90%. The high heavy metal stabilization efficiency comes directly from the electrostatic attraction between metal cations and the negatively charged AMDS surface and/or from the co-precipitation of metal oxide (hydroxide) and CaCO3, which occurs comprehensively on the AMDS surface. In the case of Zn, the stabilization efficiency in soil A was somewhat low due to the adsorption competition with Pb, but the Zn stabilization efficiency of the CMDS in soil A was higher than 80% (70% or higher for the MMDS). For soil D, the Zn stabilization efficiency of two AMDSs was higher than 85% because of the lower concentration of other heavy metals in soil D, compared to in soil A. The As stabilization efficiency of the AMDSs in soil contaminated with As (soil B and soil C) was higher than 85%, (mostly > 95%). The overall stabilization efficiency of two AMDSs for heavy metals and As were higher than 75% and 85% (mostly > 90%), respectively, regardless of soil type. We concluded that this high As stabilization efficiency was due to the formation of a new complex by ligand exchange between the Fe- (oxide) hydroxide and the arsenate and also to the cation bridge effect between the AMDS surface and the arsenate as well as the co-precipitation.