The recent research infers that the detailed characterization of lime-treated soils using analytical techniques enables better understanding of the complex soil–lime interaction mechanisms as well as the pivotal factors influencing the efficacy of lime treatment. In view of this, the present study focuses on evaluating the effects of lime treatment on the strength properties of sodium bentonite clay in terms of the variations in thermal characteristics derived by employing analytical thermogravimetric analysis. This technique is effectively used to monitor the consumption of free lime and evolution of new cementitious hydration products (viz., calcium silicate hydrate and calcium aluminate hydrate), as well as detrimental lime carbonation phenomenon occurring in the sodium bentonite-lime composite during short-term curing. Based on the comparative evaluation of untreated and lime-treated sodium bentonite, variations in the weight loss corresponding to thermal decomposition of different chemical phases are estimated. The additional inferences from X-ray diffraction and Fourier transform infrared spectroscopy analyses substantiated the interpretations of thermogravimetric results regarding the lime stabilization mechanisms and consequent strength evolution in sodium bentonite-lime composites. Thus, the present study demonstrates that the comprehensive analysis of thermogravimetric results enables reliable interpretation of the soil–lime interaction mechanisms and the evolution of strength during curing.