The application of tunnel-slag-improved high liquid limit soil as filling materials in subgrade is a green environmental technology. This study explored the influence of tunnel slag mixing on the physical and mechanical properties of improved soils, based on the engineering background of Liyu highway, Guangxi Province, China. Firstly, the optimal moisture content, maximum dry density, shear strength parameters, California bearing ratio (CBR) and resilience modulus of plain and tunnel-slag-improved high liquid limit soils were experimentally determined. Results showed that the direct utilization of untreated soil was unacceptable in subgrade practice. A significant enhancement of integrity of high liquid limit soils could be obtained by tunnel slag mixing, and the value of 15% was determined as the optimal tunnel slag content in soils, leading to improved soil performance meeting the specification requirements. Then, numerical simulation on the stability of subgrade slope of tunnel-slag-improved soils at the content of 15% was conducted. It also reported the long-term subgrade settlements. The feasibility of utilization of tunnel slag in improving properties of high liquid limit soils was further validated. Finally, a good application of tunnel-slag-improved high liquid limit soil as subgrade filling materials in Liyu highway was achieved. The findings in this study could provide useful guidance for similar engineering.