Earthworms are typical ecosystem engineers because they greatly affect the physical properties of soil in various ways. In this study, simulation experiments were performed to assess the effects of earthworms (Amynthas aspergillum) on the soil evaporation process in a subtropical region of China. Five population sizes CK (0), A1 (0), A2 (10), A3 (20), and A4 (30), four cast mulch thicknesses (0, 1, 2, and 4 cm), and four cast mulch area coverage percentages (0, 30%, 60%, and 90%) were tested with four replicates each for the different treatments. Water was applied again to the treatments until the soil water content reached 20% on day 14. The results showed that earthworms significantly increased the content of water-stable aggregates (WSA), where the WSA contents under different treatments were 35–40.6 g (P < 0.05). The soil water content decreased in the first 13 days after earthworm inoculation, before increasing gradually after adding water again. Compared with CK, the average water contents increased by 45.9–151.2 g in the earthworm treatments. When the number of added earthworms was 30, the water contents were 126.5 g in A3 and 151.2 g in A4 (P < 0.05). Different earthworm cast mulch thickness and area coverage percentages significantly reduced the cumulative evaporation (P < 0.05), where they reduced the cumulative evaporation by 31.2–63.5% and 14.5–29.8%, respectively, compared with CK. When the soil moisture was at a low level, minimal differences were observed in the evaporation rates among the treatments. Thus, the activities of earthworms can improve the soil water-holding ability and inhibit evaporation from lateritic red soil.