In this study, the beneficial reuse of alum sludge as a capping material in subaqueous contaminated sediment capping applications was investigated by finite element analysis. In the finite element analysis, the contaminated sediment was modeled on the bottom of a typical river bed geometry. The engineering behavior of alum sludge was compared with that of sand, which is a common capping material for contaminated sediments. The results of the analyses were evaluated in terms of settlement, excess pore water pressure generation, and factor of safety (FS) values. The results obtained from this study showed that the use of alum sludge capping resulted in lower settlement values compared with those of the sand capping, and FS values greater than 1.5 were obtained for all the capping systems studied, indicating that the capping systems modeled in this study were safe in terms of slope stability. Based on these results, and taking the advantage of alum sludge's ability to adsorb various contaminants into consideration, it can be concluded that the alum sludge examined in this study has physical and mechanical properties that are desirable for a capping material for use in subaqueous contaminated sediment capping applications.