In order to study the working characteristics of cap-pile method on the extremely soft foundation in mud flat, this paper carries out the field test and finite element analysis. According to the measured ground surface settlements and earth pressures, the two-dimensional plane strain model is established. Furthermore, excess pore water pressures, earth pressures, and settlements of foundation soil in different periods are examined. The results show that the differential settlements between piles and surrounding soils increase with the increasing filling height. The differential settlements lead to the occurrences of soil arching effect and tensioned membrane effect, which increase the axial force of the pile as well as the load sharing ratio of the pile and the pore water pressures of the soil at the pile bottom. After the completion of the construction, the excess pore water pressures dissipated and the foundation soil gradually consolidated. The differential settlements between piles and soils increase and then tend to be stable. The pile load sharing ratio gradually stabilized at about 80%. The geogrid has low tension and limited ability to transmit loads. Since the shallow foundation soil has negative frictional resistance to the pile, the axial force of the pile increases with the growing depth in shallow area and then decreases as the depth increases. Finally, the cap-pile method can effectively control the horizontal displacement of foundation soil.