In this study, we conducted a comprehensive investigation of the effects of NZVI on the physicochemical and geotechnical properties of Pb(II)-contaminated clayey soil. Soil slurry spiked with lead nitrate were treated with commercial NZVI at a dose of 1%, 5%, and 10% (2–100 mg Fe/dry soil g) and further consolidated in a container. A series of Pb sequential extraction procedure, laboratory vane shear test, XRD, and SEM were conducted. Results indicate that the application of NZVI induced a significant decrease in Pb bound to exchangeable and carbonate fractions and a dramatic increase of bound to the Fe–Mn Oxides and the residual fraction. The undrained shear strengths of all soil specimens were determined by vane shear tests. Results show that the introduction of Pb(II) in the soil resulted in a notable decrease in the soil vane shear strength from 16.85 kPa to 7.25 kPa. As expected, the soil vane shear strength was significantly enhanced from 32.41 kPa (1% NZVI) to 69.33 kPa (10% NZVI) after the treatment of NZVI. Simultaneously, the soil particle size of 10% NZVI treated soil specimens were of an evident growth. A new phenomenon that micro level bubble prints in the NZVI treated soil specimen was recorded. These bubbles were presumably generated from the redox of NZVI in the aqueous phase and were particular evidence in the enhancement of soil geotechnical properties. The bulk density and the porosity of Pb-contaminated soil initially decreased then increased with the addition of NZVI. On the whole, the application of NZVI in remediation of Pb-contaminated soil resulted in a dense, compact and reinforced soil.