Pb-contaminated soil poses significant environmental and health risks as well as soil stability issues. Research on sandy soils highlights CO2-enhanced reactive MgO as a promising solution for improving the solidification of Pb-contaminated soils. However, carbonation effects can differ markedly between soil types owing to varying soil properties. In this study, we evaluated the effects of CO2-enhanced reactive MgO on the engineering and environmental characteristics of Pb-contaminated red clay and explored its mechanism of carbonation solidification. The results showed that CO2-enhanced reactive MgO increased the strength of Pb-contaminated red clay to over 3 MPa within 1 h, which was approximately 25 times the strength of untreated soil (0.2 MPa) and significantly higher than that of reactive MgO-treated, uncarbonated soil (0.8 MPa). The pH of the carbonated soil (9–10) facilitated Pb2+ immobilization, and the increase over the initial parameter elevated the electrical conductivity value. Moreover, CO2-enhanced reactive MgO reduced the Pb2+ leaching concentration to below 0.1 mg/L, even at high Pb concentrations (10,000 mg/kg). Pb2+ transformed into lead carbonates during the carbonation process, with the hydrated magnesium carbonates forming a dense internal structure. This solidification mechanism included chemical precipitation, physical adsorption, and encapsulation. Notably, the carbonation time should be controlled within 1 h to prevent soil expansion. Together, these findings support the potential of CO2-enhanced reactive MgO for efficient and low-carbon application in the solidification of Pb-contaminated red clay.