To investigate the effects of initial moisture content and temperature on the Mode I fracture toughness (KIc) of frozen silty clay, a series of three-point bending tests were conducted. Rectangular specimens with prefabricated cracks were tested, and digital image correlation (DIC) technology was employed to analyze the microscopic characteristics at the crack tip. The results indicate that the Mode I fracture toughness of frozen silty clay increases with decreasing temperature and increasing initial moisture content. Temperature governs the failure mode, with plastic failure predominantly occurring at high temperatures and brittle failure at low temperatures. Based on the load–displacement curves and DIC recordings, the macroscopic fracture process of the specimens can be categorized into three stages: elastic deformation, formation of the failure surface, and specimen failure. Additionally, the crack propagation process can be further divided into three stages: initiation and development of microcracks, transition from microcracks to macroscopic cracks, and rapid development of macroscopic cracks. These findings provide critical insights for slope stability research in cold regions and offer new perspectives for engineering design and construction in similar environments.