Diatomite soil is a kind of bio-siliceous soil with complex composition and special structure, the physical and mechanical properties of diatomite soil are very important for the engineering project. In this paper, the physical properties, mechanical properties, and microstructure of diatomite soil in Zhejiang Province are studied by geotechnical tests and microscopic tests from the macroscopic and microscopic perspective. The results show that: (1) The diatomite soil has special properties different from other soils, including small particle size, low specific gravity value, high liquid-plastic limit, and low compressibility, and the strength indexes c and φ of diatomite soil will decrease with an increase in soil water content; (2) in the triaxial test, when the dry density of diatomite soil increases from 1.30 g/cm3 to 1.50 g/cm3, the effective internal friction angle of diatomite soil increases from 5.6° to 14.5° and the effective cohesion increases from 30.9 kPa to 49.6 kPa. The stress–strain curve of diatomite soil changes from weak softening type to weak hardening type when the confining pressure is above 200 kPa; (3) the diatomite soil has high porosity due to its unique microstructure; it is rich in aluminum oxides and minerals, which will greatly reduce the engineering performance of diatomite soil.