At or near saturation, collapsible soils undergo a rearrangement of their grains and water removes the cohesive (or cementing) material. In Borg El Arab, near Alexandria Egypt, soils exhibit high susceptibility for collapse when saturated. In this paper, inundation stress has been applied to investigate its effect on the collapse potential and permeability behavior of Borg El Arab soil. Because of the collapse of soil when wetted low bearing capacity and rapid substantial settlement are developed and makes it unsuitable as foundation soil or pavements sub-base in their natural condition. The collapsible soil may be treated by remove and replace method to improve strength. Experimental program was developed to explore the effect of types of compacted replacement on collapsibility potential. A series of tests were carried out to search for the most suitable types of partial replacement and the location of source of surface wetting to evaluate their effects on the reduction of settlement of a footing on collapsible soil when inundation occurs. The results show that inundationstress have strong effect on collapse potential and permeability coefficient. The behavior of a shallow foundation rests on compacted sand / crushed stone layers as partial replacement over treated collapsible soil by pre-wetting and compaction is investigated.