Abstract: Red clay is prone to softening upon water infiltration and cracking under desiccation, resulting in internal fissure development and a marked reduction in strength under dry–wet cycles, which in turn leads to frequent roadbed failures. To assess the ability of xanthan gum modified red clay to resist dry-wet cycles, the unconfined compressive strength test and direct shear test were used to study the effects of xanthan gum content of 0%, 0.5%, 1.0%, 1.5%, 2.0% and dry-wet cycles of 0, 2, 4, 6, 8 times on the mechanical properties of modified red clay. Changes in physical appearance, water content, and volumetric strain were recorded throughout the cycling process, while scanning electron microscopy (SEM) was employed to investigate the microstructural mechanisms underpinning strength deterioration. The results show that the dry-wet cycle hurts the sample's compressive and shear strength. The extent of influence decreases first and then increases with the increase of xanthan gum content, while as the number of dry-wet cycles increases, and the sample’s compressive strength, cohesion, and internal friction angle decrease to a certain extent. When the content of xanthan gum is 1.5%, the loss rate of compressive strength is the smallest, and the soil has the best dry and wet resistance. After 6 dry-wet cycles, the cohesion of the improved soil decreased by approximately 38.71%, and the internal friction angle changed between 20° and 28°, with the change range of less than 8°. As xanthan gum content increases, the gel network film on the surface of soil particles and pores is more obvious, and the cementation is stronger. The dry-wet cycle will cause the shrinkage and expansion of the improved soil, resulting in damage to the gel network membrane and crack expansion. These findings contribute to calculate the short-term or long-term stability of subgrade and provide theoretical guidance for practical engineering applications.