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Clay soils and their related abnormal behavior such as excessive shrinkage, swelling, consolidation settlement and cracking on drying has been the subject of many investigations. Previous studies mainly evaluated the effects of additives such as lime, cement and sand on these characteristics. Initial results indicated that the soil characteristics were improved. However, reportedly in many cases, these additives resulted in a decrease in plasticity and increase in hydraulic conductivity. As a result, there has been a growing interest in soil/fiber reinforcement. The present investigation has focused on the impact of short random fiber inclusion on consolidation settlement, swelling, hydraulic conductivity, shrinkage limit and the development of desiccation cracks in compacted clays. To examine the possible improvements in the soil characteristics, samples consisting of 75% kaolinite and 25% montmorillonite were reinforced with 1, 2, 4 and 8 percent fibers as dry weight of soil with 5, 10 and 15mm lengths. Results indicated that consolidation settlements and swelling of fiber reinforced samples reduced substantially whereas hydraulic conductivities increased slightly by increasing fiber content and length. Shrinkage limits also showed an increase with increasing fiber content and length. This meant that samples experienced much less volumetric changes due to desiccation, and the extent of crack formation was significantly reduced.