In open-cut assembled subway tunnels, foundation pit enclosure piles are typically cast in place. However, this conventional approach limits the functionality of the piles to serving as retaining structures during excavation, resulting in resource inefficiency and the underutilization of prefabrication techniques. To address this issue, a fully prefabricated pile-wall composite scheme is proposed for cut-and-cover tunnels to optimize the retaining effect of the piles and leverage the benefits of prefabricated technology. In this scheme, the retaining pile and lining are both prefabricated. The pile is the temporary retaining structure during pit excavation and a part of the sidewall. This scheme was researched and applied in Jinan, China. Field monitoring and numerical simulation were used to investigate the load transfer within the fully prefabricated pile-wall composite structure (PPWS) and its mechanical response, respectively. The results show: (1) The development of lateral earth pressures on the PPWS experienced three stages. The lateral earth pressure distribution indicates that the PPWS can fully activate the retaining effect of precast piles. (2) Following the backfilling of the joints, the horizontal displacement at the bottom of the precast pile reduced by 0.39 mm. Numerical simulation results indicate the effectiveness of precast pile restraint in PPWS. (3) The PPWS exhibited uniform deformation transition at the joints. The joints play a crucial role in coordinating deformation between the precast piles and sidewalls, utilizing the restraining effect of the precast piles.