The initiation and propagation of cracks will greatly affect the strength, deformation and permeability of soil, and then lead to various engineering disasters. In order to further explore the crack initiation and propagation mechanism of soil, the local water contents in three stages were measured. Besides, the lateral shrinkage characteristics of soil were also tested with the change of water content. The mechanical mechanism of the cracking process was analyzed, and the quantitative calculation and discriminant formulas for the whole cracking process of shallow soil were established. The results show that the vertical water content distribution increases linearly with the increase of soil depth during the first two cracking stages, and the cumulative horizontal shrinkage increases with the decrease of water content. Based on the surface water content and depth of shallow soil, the mathematical expressions of tensile strength and tensile stress for shallow soil can be deduced, and then the three typical cracking stages of shallow soil can be analyzed. At the early stage of cracking, the generation of new cracks leads to the decrease of tensile stress on the soil surface. The basic indicators such as total crack length, and the average width and degree of cracks, are related to tensile stress. The correlations between tensile stress and crack indicators could explain and describe the complex change process clearly in the initial stage of cracking. Moreover, combined with the initial defects of soil and the stress concentration at the crack edge, the cracking process was further analyzed and discussed.