Compacted clay is commonly used as an essential material for reducing the permeability in landfill sites. However, compacted clay has defect with shrinkage and desiccation cracking during cyclic drying and wetting, which may increase hydraulic conductivity of compacted clay. It’s necessary to modify clay, and make it have anti-cracking performance. The main objective of the study is to determine the content of fly ash on clay. Laboratory tests were done to determine optimum moisture content, hydraulic conductivity, volume shrinkage on different content fly ash modified clay. It was determined that a certain proportion of fly ash can improve the permeability of clay, and reduce the cracking clay.