The permeable pipe pile is a new type of pile with superior drainage performance and excellent bearing capacity. Currently, little consideration has been given to its radial nonlinear consolidation behavior. To investigate the radial nonlinear consolidation characteristics of permeable pipe piles, a radial consolidation model for the soil surrounding the pile was established, taking into account the free strain and the nonlinear consolidation properties of the soil (nonlinear compression and nonlinear permeability). Using the finite difference method, a solution for the radial nonlinear consolidation of permeable pipe piles was derived. Furthermore, the effects of nonlinear parameters, boundary drainage capacity, and external loads on the radial nonlinear consolidation of the soil surrounding the pile were analyzed. The results show that the ratio of the compression index to the permeability index has a more significant impact on the later stages of soil consolidation around the pile. A decrease in this ratio leads to reduced soil permeability, thereby slowing down the consolidation of the surrounding soil. Conversely, a decrease in this ratio significantly accelerates the consolidation rate. Enhancing the drainage capacity of permeable pipe piles markedly promotes the consolidation of the surrounding soil, with this effect being concentrated in the early and middle stages of consolidation. However, its influence on the time required to achieve final consolidation is relatively limited.