Dredged materials, often used as fill material in subgrade construction, land reclamation landscaping, etc., have very low shearing strength and high compressibility. As such, improvements must be made to their engineering properties before using this soil. Ground granulated blast furnace slag (GGBS) is generally considered waste and can be used for such purposes. The studies undertaken in the paper pertain to the stabilisation of dredged material collected from Dal Lake at the Shalimar site (Jammu and Kashmir) using lime-activated GGBS varying from 0 to 20% with an increment of 5%. It has been found that with the addition of activated GGBS, the liquid and plastic limits increase, and the plasticity index decreases; the maximum dry density of dredged material increases, whereas the optimum moisture content decreases. The optimal lime-activated GGBS content was found to be around 10%. CBR values were also observed to be increased significantly. However, the compressibility characteristics of soil are found to be decreased considerably with increased lime-activated GGBS. Based on the experimental studies as reported, it is inferred that lime-activated GGBS can be used beneficially to modify the engineering characteristics of the dredged material.