Studies about the strain-softening behavior of unsaturated soils published in the literature during the past three decades are summarized under three categories; namely: (i) mechanical characteristics and micromechanisms, (ii) prediction models for shear strength, and (iii) numerical methods for modeling strain-softening behavior of unsaturated soils. In addition, the influence of the soil–water characteristic curve and time effects on the strain-softening behavior of unsaturated soils are discussed. Various experimental studies related to the strain-softening behavior of unsaturated soils are summarized to interpret the mechanical behavior characteristics and micromechanisms of the strain-softening under large shear deformation. The widely used empirical/semi-empirical prediction models from the literature for interpreting the peak, critical, and residual shear strength of unsaturated soils are comprehensively summarized considering the influence of soil fabric and water phase on the shear strength. Several numerical methods (i.e., conventional plasticity, bounding surface plasticity, disturbed state concept, and elasto-viscoplasticity) of modeling the strain-softening behavior of unsaturated soils are discussed, highlighting their strengths and limitations. The comprehensive details summarized in this paper related to the strain-softening behavior is valuable for the rational analysis and design of geostructures in unsaturated soils that undergo large shear deformation.