Stone columns are economical for enhancing unstable, compressible soils and loose sand. While much research has been conducted on the vertical load capacity and bulging resistance of stone columns, little attention has been paid to their response under direct shear loading, which is critical in applications such as slope stability. This study uses physical modeling and finite element analysis to examine the influence of various encasement conditions on the sideways load-bearing capacity of stone columns. The experimental program consisted of conducting extensive direct shear tests on stone columns measuring 150 mm in diameter. The tests were conducted both with and without encasement while subjecting the columns to different levels of normal pressure. The numerical simulations, which were verified using the experimental findings, expanded the investigation to include stone column diameters of 50 and 100 mm. The findings indicate that using geosynthetics to cover stone columns greatly improves their ability to resist shear forces at the shear plane compared to regular stone columns. The dual-layer encasement resulted in a significant increase of up to 2.85 times in the apparent cohesion of the composite ground. The encasement had a greater effect on columns with smaller diameters. The mobilized shear resistance at large displacements exhibited a 60–80% increase for dual-layer encased columns in comparison to other configurations. The results emphasize the capability of encased stone columns for use in situations that require strong resistance against sideways forces and forces that cause deformation.