The present paper describes the utilization of fly ash (FA) for the purpose of soil stabilization of Sarawakian peat. The peat soil and FA samples were collected from Matang and Sejigkat thermal power station, respectively and tested in laboratory to evaluate their different physical and geotechnical properties mainly compaction, unconfined compressive strength (UCS) and the California bearing ratio (CBR) test. Different physical properties of peat soil and fly ash samples play an important role in the process of enhancing the strength of peat soil. The results show that UCS value increases with the increase of FA and curing periods. The CBR values also increase with the increase of FA at 96 hours soaking period. The results also demonstrate that, the UCS and CBR values were slightly decreased after addition of 20% FA. Therefore, locally available waste FA can be utilized with local peat for stabilization purposes which will reduce the disposal problem.