Dispersive soils are susceptible to rapid disintegration upon contact with water and have been implicated in engineering slope failures. However, a refined characterization of their response to rainfall remains insufficient. In this study, we investigated the evolution, peculiarity, and mechanisms of hydraulic failure in dispersive soil under artificial rainfall events conducted in a laboratory setting. Morphological changes, runoff properties, and soil-water interaction during and between rainfall events were observed, monitored, and analyzed. Results reveal that erosion cavities formed rapidly under a low intensity of 20 mm/h. We noted that the dominant erosion type then shifted from rill to sheet erosion when surpassing 60 mm/h. The existence of flaky debris and minuscule scarps signaled the repeated formation and rupture of the surface sealing layer, which prevented erosion of deeper soil layers. Moreover, runoff gradually roughened the micro topography of the slope by transporting clay particles. The sediment concentration of runoff fluctuated most dramatically during the first three rainfall trials. The attenuation of runoff electrical conductivity during a single rainfall event suggested the leaching of soluble salts. However, the salts migrated towards the surface during evaporation, which increased dispersion risks. Surprisingly, only 3% of soil particles were eroded in the entire test, of which 93% originated from the slope bottom platform and the remaining 7% from the slope surface. This indicated that compaction operation on dispersive soil can reduce the degree of rainfall-induced failure. The dynamics of soil water content reflected the weak permeability of compacted dispersive clay and also highlighted that the vulnerable areas were in the middle and lower parts. In summary, the failure is manifested in erodibility, superficiality, retrogressive nature, gradual progression, and recurrence. The findings acquired contribute to the understanding of dispersive soil behavior under rainfall stresses, offer insights into the mechanisms driving slope degradation and potential strategies for mitigating erosion risks.