Circulating fluidized bed slag (CFBS) is an industrial waste produced by coal combustion in power plants. To explore the application of CFB slag in cement-stabilized bases, this paper studies the influence of different dosage of CFBS on the mechanics, water stability, and shrinkage of cement-stabilized soil using laboratory experiments. The hydration activity and interface morphology of CFBS in cement-stabilized clay were observed using XRD and SEM. The improvement mechanism of CFBS on the performance of cement-stabilized clay was revealed. The results indicated that, compared with cement-stabilized clay, cement–CFBS-stabilized clay exhibited better mechanical and water stability, and significantly inhibited the shrinkage deformation of cement-stabilized clay. When the addition of CFBS was 70%, cement–CFBS-stabilized clay had the best mechanics and durability. Microscopic tests show that CFBS contains more active silicon aluminum oxide, which is easily dissolved and the hydration of which produces more gel products, so the mixture structure is denser, the strength is improved, and water does not easily evaporate; it has the characteristics of micro expansion which compensates for dry shrinkage deformation.