In this study, the influence of fly ash (FA) content (0%, 10%, 20%, and 30%) on the alteration in the physical and mechanical parameters of loess is investigated. The influences of curing time (0, 14, and 28 days) and submergence and non-submergence conditions are analyzed as well. Analysis considers the variation in Atterberg limits (liquid limit, plastic limit, and plasticity index), compaction parameters (optimum moisture content (OMC), and maximum dry density (MDD)), unconfined compressive strength (UCS) stress, UCS strain, California bearing ratio (CBR) value, and swell potential. Results show that the application of FA-stabilized loess (FASL) is effective. Specifically, the MDD decreases and the OMC increases, the UCS stress increases and the UCS strain decreases, the CBR value improves and the swell potential declines, but Atterberg limits are insignificantly changed by the increase in the FA ratio compared with those of untreated loess. The UCS stress and CBR value are improved with the increase in curing time, whereas the UCS strain is negligible. FASL under submergence condition plays an important role in improving the effect of FA on the UCS stress and CBR value compared with that under non-submergence condition. The UCS stress and CBR value are more increased and more decreased than the UCS strain in submerged samples. Therefore, the application of FASL in flood areas is important for obtaining sustainable construction materials and ensuring environmental protection.