Nowadays the use of concrete is increased due to the rapid growth of the construction industry, especially in the urban areas. Concrete, being an essential building material, has gained significant attention in the construction industry worldwide. Colloidal silica is a potential material to improve various concrete properties such as workability, strength, and durability. The percentage addition of colloidal silica in concrete has become an important topic of research these days due to its beneficial effects on concrete strength enhancement. This study aims to evaluate the effect of colloidal silica addition and replacement with cement by weight on the compressive strength of M40 grade concrete. The strength of concrete is affected by various factors such as the water-cement ratio, the type of aggregate, cement, and the admixture. The effect of colloidal silica on the workability, density, and compressive strength of M40 grade concrete was studied in the present study using colloidal silica of type CS-TX. Colloidal silica is a nanomaterial that has been widely used in recent years. Colloidal silica of the CS–TX type is replaced and added with cement at various percentages like 1.0, 1.5, 2.0, 2.5, and 3.0%, respectively, to study the improvement in compressive strength of M40 grade concrete. Use of colloidal silica increases the compressive strength by reducing the voids in the concrete. Experimental results indicate that 2% of colloidal silica is optimum for replacement of cement and 2.5% of colloidal silica is the optimum content for addition of cement in M40 grade concrete.