The experience needed to carry out engineering and construction in diatomaceous earth areas is currently lacking. This project studies the new Hang Shaotai high-speed railway passing through a diatomaceous earth area in Shengzhou, Zhejiang Province, and analyzes the hydrological and mechanical properties of diatomaceous earth on the basis of a field survey and laboratory. Moreover, a new antidrainage subgrade structure was proposed to address the rainy local environment, and field excitation tests were performed to verify the antidrainage performance and stability of the new subgrade structure. Finally, the dynamic characteristics and deformation of the diatomaceous earth roadbed were examined. The hydrophysical properties of diatomaceous earth in the area are extremely poor, and the disintegration resistance index ranges from 3.1% to 9.0%. The antidrainage subgrade structure has good water resistance and stability under dynamic loading while submerged in water. After 700,000 loading cycles, the dynamic stress and vibration acceleration of the surface of the subgrade bed stabilized at approximately 6.37 kPa and 0.94 m/s2, respectively. When the number of excitations reached 2 million, the settlement of the diatomaceous earth foundation was 0.08 mm, and there was basically negligible postwork settlement of the diatomaceous earth foundation. These results provide new insights for engineering construction in diatomaceous earth areas.