Soil is a traditional construction material that is currently experiencing a new boom as an eco-sustainable alternative for housing. In this article, a structural system made up of compressed earth blocks is analyzed as a construction alternative for seismic countries. This study evaluated the physical properties of base soil as well as an optimization process for the chemical stabilization of the mixture using cement and lime. The mechanical characterization of the blocks and of a masonry system designed to be stackable and dry joint was also performed, including the evaluation of its seismic response to cyclic shear wall tests. Results indicate that it is possible to improve the workability of the stabilized soil mixtures and the mechanical behavior of blocks in compression and tension, by using cement-lime additives in a ratio of 1:3 with respect to the dry weight of the materials. In addition, it was found that it is feasible to produce a stackable masonry system that has the capacity to dissipate energy due to friction between blocks. The parametric analysis and the calibration process of numerical models performed for the cyclic shear tests highlight the importance of using a micro-modeling approach to obtain representative models that correctly predict the experimental capacity curve in both maximum load and ductility. The use of those models in the present study allowed to adequately replicate the concentration of damage in the joints between blocks, corroborating what was observed through experimental testing.