Expansive soils swell and shrink due to changes in water content. This causes damage to structures founded in expansive soils. One common stabilization method for the improvement of expansive soil behavior involves the addition of lime. The traditional approach of evaluating the improvement effect of stabilization methods does not consider the fact that the expansive soils exist at unsaturated state. The use of the soil-water characteristic curve (SWCC) as a tool to evaluate the improvement effect of lime is examinedin this study in order to establish the relationship between unsaturated soil theory and engineering problems related to expansive soils that exist in an unsaturated condition. Three different lime contents (3%, 6% and 9%) with 7 and 14 days of curing period were considered. The improvement effect of lime was then determined by using both the traditional soil mechanics approach and the SWCC. The SWCCs were determined by using pressure plate apparatus with asuction range of 33 to 1400 kPa. The laboratory-measured data points were then curve-fitted by using the Fredlund and Xing (1994) model. The shrinkage curve (SC) was also determinedto evaluate the change in volume of the different soil samples. The experimental results indicate that SWCC is affected by lime treatment and there is a change in the SWCC parameters, and hence the shape of SWCC, as the percentage of lime is changed. This indicates that there is a potential for the SWCC to be used as a tool for evaluating the improvement effect of treatment methods. The change in volume, calculated from the SWCC and SC, is found to be a very good indicator of the effectiveness of treatment methods, indicating that the SWCC is a useful tool to check the effectiveness of treatment methods. Compared to untreated natural soil, lime-treated soil samples revealed a small change in volume. The analysis based on the traditional soil mechanics approach indicated that 9% lime and 14 days of curing is required to change the expansive soil from a category of “very high degree of expansion” to a category of “low degree of expansion”. However, the analysis based on SWCC and SC indicates that only 6% lime and 7 days of curing is required to produce the same change. This indicates that the traditional soil mechanics approach may be conservative and hence uneconomical. Keywords: Unsaturated soil, Lime stabilization, Pressure plate test, Shrinkage curve