In South Korea, Honam High-Speed Railway has a relatively large residual settlement issue and high fines content has been pointed out as one of the causes. Design guidelines regulate not to use soils containing fines content higher than 25%. However, there is no background information on the effect of fines content on settlement. Therefore, this paper aims to investigate compressional behavior according to fines content using sand and kaolinite. Oedometer test results showed that the compression index is lowest with fines content of 15% to 20% at which the mixture produced maximum density. The optimum fines content for inducing low settlement would be 15% to 20% for the sand–kaolinite mixture. Transition fines content (TFC), which shows sand-like to claylike behavior, was observed to have between 21% and 26% of fines content. Critical fines content (fcrit) where a minimum void ratio occurs was estimated as 21.67%. These behavioral changes appear when fines content is greater than the optimum fines content. SEM also shows that the kaolinite particles were overlapped, creating flat surfaces with a fines content higher than 30%, and showing clay-like behavior. Based on the analysis results, engineers can simply identify the behavior of embankment materials to ensure optimum fines content and consequently minimize long-term settlement potential.