A method of making and the resulting diatomite-modified pavement. The addition of small amounts (0.5 to 2%) diatomite by weight to conventional pavement mixes, serves to increase density, viscosity, aggregate interlock and temporarily volumetrically extends the asphalt improving compactability resulting in an emplaced pavement that has lower air and water permeability without increased instability. The improved strength of the mixed and abrasion resistance of the mastic enable the thickness of wearing course overlays to be reduced without detrimental effects of wear life. The addition of diatomite makes the pavement mix more forgiving of errors in asphalt and aggregate amounts and can result in significant reduction of cost/sq. yard of pavement.