Expansive soils are characterized by volume change due to variation in moisture content. Therncyclic wetting and drying processes causes vertical movements in expansive soils and thesernmovements lead to failure of pavements. These soils have very low load bearing capacity toornwhen wet. These problematic expansive soils, therefore, when encountered as sub-gradernshould be avoided or treated properly. The removal of expansive soils and replacement withrnsuitable fill material is an appropriate method in areas like Addis Ababa in most cases wherernthere is suitable fill material available nearby. At places, however, its feasibility depends onrnthe availability of suitable fill material within economic distances and the thickness of thernpoor sub-grade soil to be replaced. Chemical stabilization is another alternative being appliedrnworldwide even if the method is at a conceiving stage in Ethiopia. In recent years there arerntendencies to use lime and other chemicals to stabilize sub-grade and sub base materials byrnEthiopian Road Authority (ERA) and Addis Ababa City Roads Authority (AACRA). In thernpresent study, hence, the performance of a locally manufactured hydrated lime and anrnimported industry product Anyway Natural Soil Stabilizer (ANSS) were evaluated based onrnlaboratory test results on expansive sub-grade soils collected from Gerji area. The sub-gradernsoil was first characterized based on Atterberg limits, linear shrinkage, CBR and percentrnswell of CBR. The test results showed that the sub-grade soil is classified as A-7-5 in thernAASHTO and MH in USCS systems. These soils have very low load bearing capacity andrnare highly expansive nevertheless of the mineralogy of the sub-grade soil samples have nornmontimorillonite, as expected in such soils. Two soil layers on colour variations werernobserved in the field: the upper dark gray clay soil and the lower light gray clay soil. Therneffects of the chemicals were then evaluated on two soil samples. The improvement of thernsub-grade soil samples increased with increasing both dosages as well as curing periods. Inrngeneral terms, increasing the dosage has more significant effect than that of increasing therncuring period and 4% of either chemical has resulted in adequate improvements of the subgradernsoil. In most cases the performance of hydrated lime is better than that of ANSS andrnthe improvement of the dark gray clay soil is better than the light gray clay soil.