<p>Lateritic soils, commonly used as roadbed fill and landfill bedding, are prone to drying-induced cracking during the filling process, which significantly reduces their water-holding capacity by creating preferential flow paths. Previous research has primarily focused on the effects of wet-dry cycling on crack formation and its influence on the soil-water characteristic curve (SWCC), with limited attention on cracks generated by drying after compaction. This study addresses this gap by investigating the impact of drying-induced cracks on the SWCC of lateritic soils from southern Jiangxi Province. Drying crack tests were conducted at varying dry densities and initial water contents, and SWCCs of cracked and uncracked samples were obtained using the Drying Moisture and Osmotic Method (DMOM). Crack characteristics were quantitatively evaluated via the Fuzzy Comprehensive Evaluation Method (FCEM). A modified van Genuchten (v-G) model incorporating crack parameters was developed and validated using multi-factor regression analysis The results show that: (1) increasing dry density inhibits crack formation, with crack development decreasing by up to 70% as dry density rises from 1.4 to 1.7 g/cm³; (2) at a constant dry density, initial water content above 25% induces near-complete cracking; (3) cracks reduce the air entry value by up to 91.3% in low-density soils compared to a 73.4% reduction in high-density soils, indicating a stronger impact of cracking at lower compaction levels; and (4) crack length and average crack width are the dominant factors affecting water retention, while surface crack rate and fractal dimension exhibit weaker correlations. This research advances the understanding of the impact of drying-induced cracks on soil water retention, offering novel insights for applications in road construction, geology, and hydraulics.</p>