Abstract: In view of the fact that most loess in the loess regions is in an unsaturated state, lime is used to improve the unsaturated loess to solve the problem of permeability of unsaturated loess. The soil-water characteristic curves of the compacted loess and the lime-modified loess are measured by an unsaturated consolidation instrument, and the Van Genuchten model is used to fit the test data. The saturated permeability coefficients of the saturated compacted loess and the lime-modified loess are also measured. The obtained soil-water characteristic curve is modeled using the Childs & Collis-George model to predict the permeability coefficient of unsaturated lime-improved loess, and the relationship curves of the volumetric water content of unsaturated lime-improved loess, the matrix suction and the permeability coefficient are obtained so as to analyze the mechanism. The results show that the compaction degree has a significant effect on the soil-water characteristic curve of the unsaturated lime-modified loess. The larger the compaction degree, the larger the air intake value. The saturated permeability coefficient of the lime-modified loess is smaller than that of the compacted loess. Under the same compaction degree, the permeability coefficient of the lime-improved loess increases with the increase of the volumetric water content, and with the increase of the matrix suction, it first decreases rapidly and then tends to be equilibrium. When the suction is constant, the greater the compaction degree, the smaller the unsaturated permeability coefficient. The permeability coefficient and matrix suction can be expressed by a power function. The results may provide numerical calculation basis and theoretical support for lime-improved loess and roadbed projects.