Soil cracking can significantly alter the water and nutrient migration pathways in the soil, influencing plant growth and development. While biochar usage has effectively addressed soil cracking, the feasibility of using less energy-intensive hydrochars in desiccating soils remains unexplored. This study investigates the impact of wood and peanut shell hydrochars on the desiccation cracking characteristics of clayey soil. A series of controlled environmental laboratory incubations with regular imaging was conducted to determine crack development's dynamic in unamended and hydrochar-amended soils. The results reveal that the addition of wood hydrochar at 2% and 4% dosage reduced the crack intensity factor (CIF) by 22% and 43%, respectively, compared to the unamended control soil. Similarly, the inclusion of peanut shell hydrochar at 2% and 4% lowered the CIF by 22% and 51%, respectively. The presence of hydrophilic groups on the surface of hydrochars, such as O–H, CH, and C–O–C, enhanced the water retention capacity, as confirmed by Fourier-transform infrared analysis. The CIF decrease is attributed to mitigated water evaporation rates, enabled by enhanced water retention within the hydrochar pore spaces. These findings are supported by scanning electron microscopy analyses of the hydrochar morphology. Despite CIF reduction with hydrochar incorporation, the crack length density (CLD) increased across all hydrochar-amended series. In contrast to unamended soil which exhibited pronounced widening of large cracks and extensive inter-pore voids, the incorporation of hydrochar resulted in higher CLD due to the formation of finer interconnecting crack meshes. Consequently, the unamended control soil suffered greater water loss due to heightened evaporation rates. This study sheds new light on the potential of hydrochars in addressing desiccation-induced soil cracking and its implications for water conservation.