Coral sand is widely encountered in coastal areas of tropical and subtropical regions. Compared with silica sand, it usually exhibits weaker performance from the perspective of engineering geology. To improve the geomechanical performance of coral sand and meet the requirement of foundation construction in coastal areas, a novel alkali activation-based sustainable binder was developed. The alkali-activated slag (AAS) binder material was composed of ground granulated blast-furnace slag (GGBS) and hydrated lime with the amendment of biochar, an agricultural waste-derived material. The biochar-amended AAS stabilized coral sand was subjected to a series of laboratory tests to determine its mechanical, physicochemical, and microstructural characteristics. Results show that adding a moderate amount of biochar in AAS could improve soil strength, elastic modulus, and water holding capacity by up to 20%, 70%, and 30%, respectively. Moreover, the addition of biochar in AAS had a marginal effect on the sulfate resistance of the stabilized sand, especially at high biochar content. However, the resistance of the AAS stabilized sand to wet-dry cycles slightly deteriorated with the addition of biochar. Based on these observations, a conceptual model showing biochar-AAS-sand interactions was proposed, in which biochar served as an internal curing agent, micro-reinforcer, and mechanically weak point.