Collapsible unsaturated soils are characterized by a low-density composition and exhibit sudden settlement after wetting while maintaining in-situ stress levels. This issue is effectively mitigated by compaction, a simple and economical technique that improves the soil properties and geotechnical behaviour. In this study, the collapsible behaviour of a compacted sandy laterite soil is analysed, focusing on the influence of relative compaction, water content, initial suction and inundation stress. The primary aim is to analyse the effect of initial compaction conditions on collapse potential. Conventional and suction-controlled oedometer tests were conducted on soils from Ilha Solteira, São Paulo, Brazil, where there is a large amount of geotechnical data available. The laboratory data reveal that collapse deformations of compacted soil depend on relative compaction, initial water content, soil suction, and inundation stress. Poorly compacted soils exhibit greater susceptibility to collapse when wetted, and the magnitude of collapse potential varies with water content. Additionally, this study shows the influence of initial suction on collapsibility of less compacted soils. The laboratory results highlighted the importance of considering suction and inundation stress in understanding the collapsible behaviour of compacted soil, whereas traditional empirical methods often emphasize low density and water content as primary factors predisposing soils to collapse.