The creation of transportation infrastructure (especially roads/highways) necessitates a great deal of natural materials that form the embankment and subgrade layers. Such reliance on natural virgin aggregates and soils has led to excessive depletion of natural resources through resource exploitation and ecological damage. Concurrently, industrialization leaves a great deal of by-products and wastes in its wake with immense disposal and leachate/pollution concerns. Therefore, industrial by-products as sustainable alternatives in the creation of embankments and subgrades, i.e., fly ash, blast furnace slag, red mud, steel slag, quarry dust, construction and demolition (C&D) waste, become more and more desirable. This review paper examines the geotechnical, environmental, and economic parameters of such materials for a performance-based evaluation of success, advantages, and disadvantages. Specific attention on laboratory studies, field applications, stabilization ability, and sustainability evaluates the materials as replacement candidates for conventional materials. The results found that with proper investigation and treatment of industrial by-products, the sustainability of a project can be enhanced from an environmental and economic perspective without sacrificing engineering performance standards.