<p>Owing to its large pore ratio, high water content, and considerable shrinkage, red clay in the Guilin area can easily cause engineering geotechnical problems, such as slope instability and roadbed subsidence in the seasonal flood season. Therefore, green, low-carbon, and efficient soil improvement technologies are urgently required. This study used activated MgO carbonation technology to improve red clay. The effects of initial water content, carbonation time, and activated MgO content on the improvement effect and durability were analyzed using triaxial tests, microscopic analysis, and dry–wet cycle fracture tests. The results show that the stress–strain curve of the improved red clay sample is mainly strain softening, and the deviatoric stress is positively correlated with the confining pressure. The carbonation of active MgO can significantly improve the strength characteristics of red clay, in which the initial water content and carbonation time play a key role; however, its improvement effect is affected by the content of active MgO. The dry–wet cycle test showed that this technology can effectively inhibit crack propagation and improve soil durability. The microscopic test results show that the carbonation reaction mainly produces hydrated magnesium carbonate (HMCs), and its nesquehonite cementation is very important for enhancing the soil structure. However, an excessively long carbonization time will destroy the soil structure, and a high water content will inhibit the formation of HMCs and reduce the improvement effect. This study provides a theoretical basis and technical support for the application of red clay in improvement engineering.</p>