In this paper, natural palm fiber was used to reinforce clay. Through a series of unconfined compressive strength tests, the compressive strength characteristics of palm fiber reinforced clay at different rates of reinforcement and soil density were studied experimentally, and the reinforcement mechanism was analyzed profoundly. The results show that palm fiber can improve the compressive strength of clay to a large degree. When water content and soil density are constant, the compressive strength of reinforced clay increases with the increase of reinforcement ratio. When the moisture content and reinforcement ratio are constant, the compressive strength of reinforced clay increases with the increase of soil density. This can be attributed to that palm fiber and soil particles are interwoven and staggered to form a spatial network structure. At the same time, the bending deformation of palm fiber and soil in the process of the reinforcement can promote the close contact between the soil particles effectively, and consequently leading to the blocking of the soil displacement and improvement of the soil strength.