Reactions between lime, alumina released from clay during pozzolanic reactions, and sulfates present in some soils, have been responsible for the deterioration and ultimate failure, by expansion, of several lime stabilization projects, by causing the formation of the highly expansive crystalline mineral ettringite. Based on an extensive literature review, the mechanisms for these reactions were hypothesized, and a laboratory research program using both artificial and natural lime-treated soil specimens was designed and undertaken. The strength, swelling, pH, compositional, and micromorphological characteristics of the treated specimens were determined following different curing times and soaking conditions. Swell development in some of the specimens prepared, in relation with pertinent strength, pH, composition, and micromorphological data obtained, allowed the delineation of the underlying mechanisms leading to heave and deterioration. It was found that the amount of heave following ettringite hydration and growth is a function of the amount and rate of release of alumina into solution. The amount and type of sulfates present, and the amount and type of lime used are also important factors in the development of heave. Moreover, temperature and relative humidity fluctuations were also found to play an important role in the overall ettringite-related heave mechanism, as they affect reaction rates, solubilities of species, and the overall stability fields of a soil system’s components. Finally, the present study was successful in developing a soil pretreatment method that would ensure safe performance of lime-stabilization applications in sulfate-bearing soils. Pretreatment of the artificial lime-treated soil mixes with barium compounds was effective in eliminating ettringite formation. Further research is needed to assess the effectiveness and the required levels of barium pretreatment in field applications. This pretreatment method, upon appropriate modifications, could be potentially applied in other sulfate-related deterioration problems.