The effect of unsaturated soils on pavement performance is examined through a case history involving a narrow pavement constructed on at-grade section. The pavement function was for bicycle and pedestrian traffic in a recreational project in Oklahoma City, Oklahoma. The pavement section consisted of asphalt concrete surface course underlain by aggregate base on a prepared subgrade. Following construction, and during a very dry weather cycle, the pavement experienced a total of 3237 m of predominately longitudinal cracking and surface undulation. A reconnaissance of the pavement extent (5.58km) indicated that 68% of the cracking occured in one pedological soil series. A geotechnical study was performed that included: pavement core and base course tests, hand auger and continous standard penetration test borings, index and engineering property tests and filter paper method soil suction testing. Examination of an average yearly water balance prior to and following pavement construction mechanism. Estimates of field capacity were made from water balance calculations. The Thornthwaite Moisture Index (TMI) and the Soil Moisture Deficits (SMD) were estimated for the period prior to and following construction by comparisons of monthly rainfall and monthly potential evaporation resulting in indications of potential shrinkage and cracking. A characteristic curve was developed from the total suction measurement using the filter paper method. Analysis of available information indicates that the change in the total suction was responsible for soil shrinkage. Suction changes were determined through suction versus depth profiles over time to predict the initial and final suction input and using initial calculated suction from the characteristic curve(s). Finally it was shown that the change in suction, resulting in lateral shrinkage of the soil, caused lateral forces that easily exceeded the tensile strength of the asphalt concrete and aggregate base course