The inorganic solid waste generated in pulp and paper industries called pulp mill fly ash (PFA) is a potentially valuable resource as supplementary cementitious material. However, large PFA volume is discarded in landfills due to stringent environmental regulations and lack of proper guidelines for safe alternative applications, thereby posing substantial environmental liability. The present study investigated the effectiveness of recycled PFA as a green binder for stabilizing weak silty sand pavement subgrades by conducting a series of laboratory experiments. The important physicochemical and ecotoxicological properties of PFA indicated its valuable potential for beneficial application as an energy-efficient and low embodied carbon construction raw material. Further, the substantial soil strength and stiffness after PFA treatment and short-term curing under ambient conditions indicated its efficiency as an effective stabilizer. The dramatic improvement was mainly due to the hydration reactions of calcium-rich PFA, leading to stable cementitious compounds. Microstructural evolution of PFA treated and cured soil revealed the formation and deposition of new products in the inter and intra-aggregate pores, thereby forming strong inter-particle bonds and a dense matrix with refined pore structure. Further, the leaching tests confirmed that the cementation process minimized the bio-availability of toxic metals present in the treated soil by encapsulating in the newly formed water-stable compounds. These results demonstrated that recycled PFA could be successfully implemented as an environmentally and economically sustainable binder in road construction and rehabilitation applications, reducing stockpiles of this waste and associated ecological footprints.