The use of ground granulated blast furnace slag (ggbs) is well established in many cement applications where it provides enhanced durability, including high resistance to chloride penetration, resistance to sulphate attack and protection against alkali silica reaction (ASR). The use of ggbs in soil stabilization is, however, still a novel process in the UK although it has been used in South Africa. This paper reports on efforts to extend the use of ggbs to highway and other foundation layers by determining the beneficial effect which it has on the reduction of expansion due to the presence of sulphates. The paper describes the results of laboratory tests on lime-stabilized kaolinite containing different levels of added sulphate to which different amounts of ggbs have been added. The tests determine the strength development of compacted cylinders, moist cured in a humid environment at 30°C, and the linear expansion of these moist cured cylinders on soaking in water. The results illustrate that small additions of ggbs to sulphate containing clays which are stabilized with lime reduce substantially their expansion when exposed to water and have no significant deleterious effect on strength development.