Abstract: The influence of occurrence form of free iron oxide (FIO) on thermal property of lateritic clay is still unclear. In this study, the thermal probe method is used to measure the thermal conductivity (TC) of undisturbed and compacted specimens before and after removing FIO. Combined with the evolution of microstructure characteristics, the influence mechanism of FIO and specimen preparation method on TC is investigated. Thermal property test results show that the TC of compacted specimens is lower than that of undisturbed specimens (US) under the same water content, with an average decrease of about 4.8%. After removing FIO, the TC of the US significantly increased, with an average increase of about 29.3%. Moreover, the hysteresis phenomenon between the TC and volumetric water content of US after FIO removal has been weakened. The microscopic test results show that pore number in US after FIO removal is significantly less than that in untreated specimens. There is a small number of larger pores with a pore size of ~10 μm in US without FIO removal. The larger pores are basically eliminated in US after FIO removal. The mechanism by which FIO affects the TC of lateritic clay can be understood as: FIO can aggregate and bond soil particles or aggregates in the form of "encapsulation", "bridging", and "attachment". After removing FIO, part of larger aggregates is dispersed into smaller aggregates or soil particles, which in turn fill the larger pores, increasing the contact and heat transfer paths between soil particles.