The detrimental effect of water in asphalt mixtures is regarded as one of the major distresses in flexible pavements since it is generally accompanied by mechanical related distresses. This detrimental effect is a complex phenomenon and involves thermodynamic, chemical, physical and mechanical processes. Several methods are used to reduce the moisture sensitivity of mixtures, one of which is to add hydrophobic material in asphalt mixtures as an additive. In this study, amorphous carbon powder, a by-product of paraffin production factory, is used as a replacement of filler (25, 50, 75, and 100%) and as a modifier of bitumen (5, 10, and 15%) to improve the hydrophobicity of mixtures. The sessile drop test was used along with several conventional methods to investigate the hydrophobicity and moisture sensitivity of mixtures. Mechanical stability of mixtures modified by the amorphous carbon powder was also studied using dynamic creep and wheel tracking tests. The results showed that not only did the hydrophobic powder improve the moisture sensitivity, but it also increased the rutting resistance of mixtures. The enhancement of moisture susceptibility was more pronounced when carbon powder was incorporated as filler compared to that of using as binder modifier. However, dynamic creep and wheel tracking test results showed bitumen modified mixtures are more resistant to mechanical deformation. The results of this research provide more insight on the application of waste carbon powder to produce environmental friendly asphalt mixture.