The Tarim river’s main stream contains substantial deposits of aeolian sand. Due to the scouring effect of seasonal floods, sliding failures frequently occurs along the riverbanks. To investigate the failure mechanisms, we conducted indoor direct shear, compression, and penetration tests to explore the variation in the mechanical properties of aeolian sand under different water content and dry density conditions. The results show that as water content increases, cohesion initially increases and then decreases, reaching a maximum at the optimum moisture content. This relationship can be expressed by a quadratic function, whereas the internal friction angle decreases linearly. The formation of a viscous water film on the particle surfaces contributes to these effects. Beyond the optimal water content, the viscosity of the water film weakens, resulting in a decline in cohesion and increased sliding between particles. The thickened water film also reduces sliding friction as particles roll over one another. As dry density increases, both cohesion and internal friction angle increase linearly. This is due to decreased particle spacing, enhanced van der Waals forces, and improved inter-particle locking. These factors collectively lead to greater resistance to shear displacement and higher internal friction. Additionally, with increasing water content, both the compression coefficient and modulus of resilience show a linear increasing trend. Under the same axial stress, higher water content leads to a thicker water film, reduced interparticle resistance during displacement, greater compressibility, and higher rebound potential. Conversely, increasing dry density results in a linear decrease in the compression coefficient and a linear increase in the modulus of resilience. Closer particle contact and increased resistance during displacement contributes to reduced compression deformation and enhanced elastic rebound. The permeability coefficient also decreases linearly with increasing dry density, ranging from 1×10^-4 cm/s to 3×10^-4 cm/s, which is 2 to 3 orders of magnitude lower than traditional theoretical estimates. A modified theoretical formula for calculating the permeability coefficient is proposed. After eliminating the errors caused by the low dry density, the experimental values closely match the empirical calculations, with the relationship described by a linear function. As dry density increases, the resistance to water molecule migration through soil pores rises, resulting in decreased permeability.