Soil-water characteristic curve is an important parameter for hydro-mechanical behaviour of unsaturated soil. Experimental study on compacted unsaturated loess was carried out by using unsaturated soil oedometers in this study and the effects of vertical stress and drying-wetting cycle on soil-water characteristics were investigated. The test results show that the air-entry value and desorption rate increase with increasing vertical stress for compacted unsaturated loess. In a drying-wetting cycle, the water content along the drying curve is higher than that along the wetting curve at same matric suction. The size of hysteresis loop between drying and wetting curves of the compacted unsaturated loess decreases with the number of drying-wetting cycles. The sizes of hysteresis loop are different under different vertical stresses.