Sodium bentonite is recognized as a natural pozzolan that can improve the mechanical properties of cemented materials due to its fineness and high content of silica and alumina. When mixed with cement paste in an appropriate amount, it is capable to impart pozzolanic effect which is vital to ensure continuous strength gain of cemented materials. Besides, the fineness of sodium bentonite enables the clay to bring filler effect on cemented materials, thus refining its pore spaces and reinforcing its structures. For stabilization of highly organic soil such as peat, research works that aim to quantify these effects with sodium bentonite as a natural pozzolan are relatively few. This article focuses on laboratory investigation on the application of sodium bentonite to maximize the filler and pozzolanic effects of stabilized peat. The outcome of the laboratory investigation is an optimal mix design of stabilized peat, which can be effectively applied to improve peat in a geological condition of swampy area for highway construction. Other than sodium bentonite, calcium chloride, Portland Composite Cement (PCC) and silica sand were used as additives to stabilize the peat sampled from Sri Nadi village, which is located in the area of Klang, Malaysia. To develop the optimal mix design, specimens of stabilized peat were tested in unconfined compression, direct shear and falling head tests. Both elemental composition and microstructure of the stabilized soil were examined using energy dispersive X-ray (EDX) apparatus and scanning electron microscope (SEM). It was found that test specimen of stabilized peat containing 10 partial replacement of PCC with sodium bentonite has the maximum unconfined compressive strength at 7days of curing in water and under the application of 50kPa initial pressure. Besides peat, the test specimen was formulated with a 300kgm-3 binder dosage and a 596kgm-3 silica sand dosage. At the same mix design, test specimens of stabilized peat have high values of cohesion, high values of angle of internal friction and very low rates of permeability, which are comparable to that of intact clay with a practically impervious drainage characteristic. Also, it was discovered that after testing, the test specimens showed a progressive increase in the direct shear parameters and a continuous decrease in the rate of permeability with increasing curing time in water. In the EDX and SEM analyses, high peaks of calcium, silicon, aluminum and oxide elements, and insignificant pore spaces of the stabilized peat were observed. This proves the existence of cementation products of mainly calcium silicate hydrate (CSH) and calcium aluminate hydrate (CAH) crystals that were responsible to bind the organic and soil particles together to form stabilized peat.