In the western regions of China, loess soils are widely used as fill materials in the construction of highways and building foundations. The hydraulic conductivity of this fill material is a significant parameter for initial engineering designs, but currently there are a very limited number of investigations into this aspect. In this study, a series of tests on compacted loess soils was conducted to determine how the dry density and water content affect loess permeability. The test results show that the hydraulic conductivity decreases gradually with the final water content or with increase in the final dry density. The phenomenon is induced by a decrease in cumulative volume or void ratio, which is verified by the results of mercury intrusion porosimetry and scanning electron microscopy images. A new mathematical model is proposed for predicting the value of k in compacted loess soils, expressed as a function of water content and void ratio.