This paper presents the experimental analysis that was conducted on small-scale 1g physical models of piled raft foundation structures with a group of 2 × 2 piles in loose sand. The purpose of the piles was to reduce the settlement of the raft. The test program included twelve experiments, three of which were conducted on a raft alone and nine on piled rafts at pile distances of 3d, 4d, and 5d and pile lengths of 10d, 20d, and 40d, where d is pile diameter. The test results show that the current conventional approach to design of piled raft foundations, at a high safety load factor in piles that assume to take the whole external applied load, is very conservative. Instead, it is more economical to apply a low bearing capacity factor for piles as settlement reducers and maximize use of raft bearing capacity to carry part of the external load.