South Africa is cut-across an arid and semi-arid zone, this implies that 95% of its roadbed is under unsaturated condition. In this context, resilient performance of subgrades is determined considering matric suction () and traffic loading parameters for resilient modulus (M-R) analysis through the application of unsaturated soil mechanics. Expansive natural subgrade soil sample collected from Northern Cape in South Africa is selected for this study. Series of M-R tests, Free swell index tests, Zero swelling tests, suction tests, X-Ray Diffraction and Scanning Electron Microscopy tests were conducted to investigate the unsaturated response of expansive subgrade stabilized with varying percentages 4%, 6%, 8% and 10% of activated fly ash (AFA). The suction components of the representative subgrade soils were determined through filter paper method. The soil-water retention curve (SWRC) was also analysed using Fredlund and Xing, and Seki's models. The results showed that inclusions of 6%, 8% and 10% AFA caused some considerable increase in M-R and suction values to a limiting values 6% AFA content, below which resilient modulus values were reduced. The low M-R values are recorded in 4% AFA stabilized specimen, as a result of insufficient free reactive calcium oxide. This resulted to incomplete pozzolanic reaction with the clay minerals. Significant changes were observed in the soil pore structure, based on microstructure analysis of the stabilized subgrade soils. Inter-cluster cemented bonds, were noted on the surface structure of the stabilized subgrade compared to unstabilized subgrade soil, due to increase in M-R.