Clay minerals in manufactured sand exacerbate plastic shrinkage cracking of cementitious materials. The impact of clay content on plastic shrinkage cracking and the underlying mechanism were comprehensively investigated. The results indicate that clay considerably mitigates the plastic settlement while significantly aggravates the plastic shrinkage, triggering more severe cracking. Water absorption of clay substantially lowers the permeability of mortars, which accounts for the reduction in bleeding, evaporation and plastic settlement. The intensified plastic shrinkage can be attributed to the accelerated build-up of capillary pressure and the self-contraction of clay. Furthermore, the critical cause of the more severe cracking with higher clay content is the rapid increase of plastic shrinkage and the reduction in plastic tensile strength.