This paper presents the result of strength behavior of laterite soil compacted with differential water content and the compacted soil were analyzed by Finite Element Method. The results show that the soil are composed of Oxides of Alumina(Al2O3), Silica(SiO2), Potassium(K2O), Titanium(TiO2), Magnesium(Mn2O3) and Iron (Fe2O3).The micro structure of the soil is angular shape and dispersed layer within the soil can be classified as SP and A - 2 - 7 with the USCS and ASSHTO system respectively. The results of unconfined compression test show that the variation of water content used for compaction have directly affect to the soil strength as a result of the increase or decrease of water content changes the surface tension within soil mass and the ability of soil grains movement. The results of analysis of strength behavior of compacted laterite soil with finite element method show that the mechanism of soil strength related to 3 states until the soil mass failure. Such a mechanism, which caused internal friction at contact surface within soil grains work together with surface tension from capillary attraction.