Mudstone not only swells and deforms but also be softened during water absorption because it contains many hydrophilic clay minerals. To study the influence of water on the swelling characteristics and mechanical behavior of mudstone, the water softening effect is first considered in the moisture diffusion-fracture coupling model based on the finite-discrete element method (FDEM). Then, the micro parameters of mudstone are calibrated by uniaxial, triaxial compression, and swelling tests. Subsequently, the coupling model is employed to perform uniaxial compression and triaxial compression numerical tests on the water-soaked mudstone. Results indicate that the mechanical strength decreases with the increase of water content, and the modeling results are consistent with the laboratory results. Besides, the failure pattern under uniaxial compression changes from shear failure to tensile failure as water content increases from 0% to 6%, while that of mudstone under triaxial compression tends to conjugate shear failure with the increase of water content and confining pressure. For all mudstones with different water content, the proportion of shear cracks increases with the increase of confining pressure. Finally, the effects of homogeneity index and swelling coefficient on the deformation, mechanical properties, and failure patterns of mudstone are discussed. The results in this paper provide a reference for understanding the mechanism of swelling characteristics and strength degradation of soft rock. •A FDEM coupling model is first employed to investigate the mechanical behavior of mudstone after encountering water.•Confining pressure reduces the water softening effect.•The failure patterns of mudstone with different water content are described.