Vacuum preloading of clay deposits is becoming an increasingly popular ground improvement technique. Although many studies have been reported in literature, the mechanism of vacuum preloading is still not properly understood. Soil under vacuum preloading is expected to undergo an inward lateral deformation, therefore the influence of lateral deformation on volumetric strain requires further analysis. This paper addresses this aspect through laboratory studies on reconstituted samples of kaolinite. The Rowe cell apparatus was modified to measure lateral deformation under various states of stress because lateral and vertical deformation of soil depends on its state of stress and associated lateral pressure. A method for predicting the volumetric and lateral strains under vacuum consolidation is proposed and then applied to two case studies in China.