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This paper presents the results of studies of deformation, strength and collapsibility of loess soils. Samples were taken from Al Dalam in central Saudi Arabia, which resembles an arid region. These samples were subjected to various laboratory tests to determine their physical and engineering properties. Sets of oedometer and direct shear tests were carried out in which the initial dry density and the normal pressure at wetting and shearing were each varied in turn. Oedometer results indicate that collapse potential decreases with density and increases logarithmically with normal pressure. Shear induces further collapse potential which increase with density due to further destruction of soil fabric. A unique shear stress–shear strain relationship was obtained for specimens prepared at different initial fabrics. Dry and soaked failure envelopes were both non-linear in the low-pressure range. Wetting induced a reduction in the shear strength parameters. The results of the tests are reported, and the significance of each variable is assessed.