Changes in the physical properties of a degraded hardsetting soil (Alfisol) after treatment with an anionic polymer (PAM) at a range of application rate (0–0.01% by weight) and antecedent soil water content were investigated. Significant improvement in soil physical properties, namely increased water stable aggregation, reduction in tensile strength and bulk density was detected in the treated soil at the lowest application rate (0.001%) and the effects increased with increasing rate of application. At the same polymer application rate, the improvement was greater at lower antecedent soil water content. However, the soil water content had a much smaller effect on soil physical properties than the polymer application rate. While zero germination was observed in the control soil (no polymer), significant improvement in germination of cotton was detected at an application rate of 7 kg ha −1 (0.005% of polymer by weight to 1 cm depth). The reduction in tensile strength of the polymer amended soil was most significantly related to the decrease in the amount of fine material ( < 50 μm) produced on wetting. Therefore, the anionic polymer ameliorates hardsetting by promoting formation of water stable bondings within microaggregate size range (< 250 μm).