To advance the concept of green development and promote the reuse of red layer residue resources, confined expansion tests were conducted on compacted red layer mudstone clast samples from the Tianshui area of Gansu Province as a research object.An improved Huder-Amberg expansion model was established to obtain the function of final moisture content varying with axial pressure and the curves of compression modulus degradation with increasing moisture content. Furthermore, a layered numerical calculation method based on humidity field theory was proposed to simulate water-induced expansion deformation in roadbeds. The findings indicate that: 1) despite compaction, the red layer mudstone clasts exhibited substantial expansion when exposed to water, reaching a maximum expansion stress of 120.0 kPa and a confined expansion ratio of 0.163. 2) As applied axial pressure decreased from the maximum expansion stress value to zero, the final moisture content of the compacted mudstone clast samples increased from 20.6% to 40.0%, concurrently with a decrease in compression modulus from 3 605.8 kPa to 34.1 kPa. 3) The method for determining the water-induced linear expansion coefficient in layered roadbed construction resulted in greater water-induced expansion deformation compared to non-layered methods. This approach is considered more conservative and safer for engineering design. 4) The water-induced expansion of mudstone clasts exceeded the requirements specified in relevant standards, making them unsuitable for direct use as roadbed filler. However, adding 2% cement can effectively address this issue.