This study explores whether the polyethylene terephthalate bottle shreds (PETBS), could be a viable alternative additive in order to reduce the usage of traditional cement in geotechnical and transportation projects. Through a comprehensive study, clayey soil was stabilized with varying quantities (0.1–1% of solid mass) of PETBS of two different size ranges. Optimal dosages were chosen, followed by additional tests incorporating small amounts of (5, 7 and 10% of solid mass) cement enhancement. After curing periods of 7 and 28 days, California bearing ratio (CBR) tests and ultrasonic pulse velocity (UPV) test results revealed that the addition of PETBS enhanced CBR values and initial shear modulus (G0) in both plain and cement treated samples. Scanning electron microscope (SEM) images also affirmed the improvement of strength at the microstructural level. Notably, PETBS of size 2–4.75 mm exhibited superior performance compared to size 0.42–0.841 mm, with an optimal content range of 0.6–0.8%. It was observed that the addition of PETBS to artificially cemented soil improved CBR values by up to 35%, while also modifying stiffness and brittleness, rendering the soil more ductile. Ultimately, a regression model was proposed to facilitate estimates of CBR and G0 in PETBS-reinforced cemented clay, to accommodate varying PETBS grading and content. The suggested approach promotes cost-effective and eco-friendly solutions by reducing pavement thickness and enhancing soil stability, demonstrating the potential of repurposing PET waste as a sustainable strategy in various engineering projects.