The soils suffer dry-wet cycles in nature and engineering due to the change of temperature, rainfall and the fluctuation of the groundwater level. The shrinkage-swelling deformation and mechanical properties evolve with the variations of moisture content during a dry-wet process was investigated by laboratory dry-wet cycle tests of a weathered mudstone soil. A DEM approach was developed for simulating the mechanical behaviors during the dry-wet process of the studied soil, considering the shrinkage-swelling deformation by adjusting the shrinkage or swelling ratio of the clay aggregate particles. The irreversible shrinkage-swelling deformation mechanism and the strength degradation mechanism were revealed. The results showed the developed DEM simulations can represent the deformation and the mechanical properties of soils during the dry-wet process. The shrinkage rate of soil decreases with the moisture content from saturation value to 5%, due to the reduction of the shrinkage potence of the clay aggregates. The irreversible shrinkage deformation of soils during a dry-wet process is because the limit swell potence of clay aggregate particles during the wetting process, leading to the swell during the wetting less than the shrinkage during the drying process. The strength degradation was divided into reversible portion mainly affect by the moisture content, and the irreversible portion affected by the meso-crack evolution during the dry-wet process. The large increase of meso-crack number during the drying leads to the rapid reduction of irreversible soil strength, while the decrease of porosity leads the increase of particle contacts and healing of the irreversible soil strength.