Controlling the differential settlement of new and old roadbeds is a core challenge in highway widening projects. To reveal the mechanical response and settlement evolution patterns of the subgrade during widening, a finite element model based on Abaqus is established and the interaction mechanism between new and old subgrades and the settlement characteristics throughout the construction process are systematically analyzed. The research results show: 1) The instantaneous settlement at the old subgrade slope foot caused by bench excavation is 0.94 cm, mainly caused by slope unloading and rebound; The cumulative peak settlement of the new roadbed filling and consolidation reaches 7.02 cm, with the settlement peak located in the newly widened area; 3) The impact of bench height on settlement response is limited; its main engineering significance lies in enhancing the shear strength and interlock effect of the joint surface; bench dimensions are controlled by the height-to-width ratio (about 1:2) and excavation stability; It is recommended to set the standard value at 0.5 m, with the optimization range controlled between 0.5 ~ 1.0 m; 3) Laying fiberglass geogrid can significantly suppress subgrade settlement, reducing the maximum settlement of new subgrades by 11.4%. The research results can provide theoretical basis and technical support for differential settlement control and construction parameter optimization in similar highway reconstruction and expansion projects.