Desiccation cracking is a common phenomenon in clay materials, which may considerably increase the hydraulic conductivity of soil. This issue is one of the main concerns in the design and construction of landfill covers, especially, in arid regions. For some highly plastic soils, permeability increases during cyclic drying and wetting are not significant, even though cracking may clearly be noticed in the soil. These cracks may self-heal during subsequent wetting and saturation processes. In the present study, large scale experimental models of various natural clayey soils with various plasticity indices were subjected to cyclic drying and wetting and hydraulic conductivity testing to better understand cracking behaviour and self-healing in fine-grained soils. The soils are candidate clay liner and cover materials. Experimental models in which cracks formed during drying were tested for soil hydraulic conductivity. The results indicated that cracking and hydraulic conductivity of clays are controlled by soil properties, especially plasticity and swelling. Cracking of the specimens resulted in an increase in hydraulic conductivity, sometimes as large as five to ten orders of magnitude. The hydraulic conductivity of highly plastic clays decreased with an increase in permeation time because of self-healing.