Poor subgrade soil exhibits low strength and engineering properties, and hence additive materials are mixed with it to enhance these characteristics. Soil reinforcement is a popular technique to enhance the engineering properties of soil. In the present study, the research aims to investigate the characteristics of fibre-reinforced soil for subgrade application. The fine-grained soil was mixed with Polypropylene fibres of the Reliance Recron 3 s brand. The optimum fibre content was observed as 1% using the unconfined compressive strength (UCS) test and the value obtained was 977.48 kN/m2. Based on the optimum fibre content, a series of tests were performed such as the UCS test, CBR test, RLCBR test, freezing and thawing test, and soaking and drying test at different physical states. The result of the tests showed a decrease in UCS, CBR and stiffness values of normal and fibre-reinforced soil with an increase in various water content. However, fibre-reinforced soil showed improvement in all the tests compared to that of unreinforced soil. Moreover, the CBR value of fibre-reinforced soil was found higher than that of fibre-reinforced soil under freezing–thawing and soaking-drying conditions. The improvement of fibre-reinforced soil under freezing–thawing test indicates its suitability in high-altitude and cold areas having temperatures below 0 °C. Further, the CBR value of both normal and fibre-reinforced soil was found to increase with an increase in water content under soaking-drying conditions. Overall, the study showed the auspicious utility of fibre-reinforced soil as subgrade material under various environmental conditions.