Soil consolidation refers to the mechanical process by which soil changes volume gradually in response to a change in pressure. This happens because soil is a three-phase material. The first phase consists of soil grains, and a combination of void (air) or other fluid (typically groundwater) comprise the second and third phases. When soil saturated with water is subjected to an increase in pressure, the high volumetric stiffness of water compared to the soil matrix means that the water initially absorbs all the change in pressure without changing volume, creating excess pore water pressure. As water diffuses away from regions of high pressure due to seepage, the soil matrix gradually takes up the pressure change and shrinks in volume. The theoretical framework of consolidation is therefore closely related to the concept of effective stress, and hydraulic conductivity. The early theoretical modern models were proposed one century ago, according to two different approaches, by Karl Terzaghi and Paul Fillunger. The Terzaghi’s model is currently the most utilized in engineering practice and is based on the diffusion equation.

In the narrow sense, "consolidation" refers strictly to this delayed volumetric response to pressure change due to gradual movement of water. Some publications also use "consolidation" in the broad sense, to refer to any process by which soil changes volume due to a change in applied pressure. This broader definition encompasses the overall concept of soil compaction, subsidence, and heave. Some types of soil, mainly those rich in organic matter, show significant creep, whereby the soil changes volume slowly at constant effective stress over a longer time-scale than consolidation due to the diffusion of water. To distinguish between the two mechanisms, "primary consolidation" refers to consolidation due to dissipation of excess water pressure, while "secondary consolidation" refers to the creep process.

The effects of consolidation are most conspicuous where a building sits over a layer of soil with low stiffness and low permeability, such as marine clay, leading to large settlement over many years. Types of construction project where consolidation often poses technical risk include land reclamation, the construction of embankments, and tunnel and basement excavation in clay.

Geotechnical engineers use oedometers to quantify the effects of consolidation. In an oedometer test, a series of known pressures are applied to a thin disc of soil sample, and the change of sample thickness with time is recorded. This allows the consolidation characteristics of the soil to be quantified in terms of the coefficient of consolidation (${\displaystyle C_{v}}$) and hydraulic conductivity (${\displaystyle K}$).

Clays undergo consolidation settlement not only by the action of external loads (surcharge loads) but also under its own weight or weight of soils that exist above the clay.

Clays also undergo settlement when dewatered (groundwater pumping) because the effective stress on the clay increases.

Coarse-grained soils do not undergo consolidation settlement due to relatively high hydraulic conductivity compared to clays. Instead, coarse-grained soils undergo the immediate settlement.

The first modern theoretical models for soil consolidation were proposed in the 1920s by Terzaghi and Fillunger, according to two substantially different approaches. The former was based on diffusion equations in eulerian notation, whereas the latter considered the local Newton’s law for both liquid and solid phases, in which main variables, such as partial pressure, porosity, local velocity etc., were involved by means of the mixture theory. Terzaghi had an engineering approach to the problem of soil consolidation and provided simplified models that are still widely used in engineering practice today, whereas, on the other hand, Fillunger had a rigorous approach to the above problems and provided rigorous mathematical models that paid particular attention to the methods of local averaging of the involved variables. Fillunger’s model was very abstract and involved variables that were difficult to detect experimentally, and, therefore, it was not applicable to the study of real cases by engineers and/or designers. Nevertheless, this provided the basis for advanced theoretical studies of particularly complex problems. Due to the different approach to the problem of consolidation by the two scientists, a bitter scientific dispute arose between them, and this unfortunately led to a tragic ending in 1937. After Fillunger’s suicide, his theoretical results were forgotten for decades, whereas the methods proposed by Terzaghi found widespread diffusion among scientists and professionals. In the following decades Biot fully developed the three-dimensional soil consolidation theory, extending the one-dimensional model previously proposed by Terzaghi to more general hypotheses and introducing the set of basic equations of poroelasticity. Today, the Terzaghis’ one dimensional model is still the most utilized by engineers for its conceptual simplicity and because it is based on experimental data, such as oedometer tests, which are relatively simple, reliable and inexpensive and for which theoretical solutions in closed form are well known. According to the "father of soil mechanics", Karl von Terzaghi, consolidation is "any process which involves a decrease in water content of saturated soil without replacement of water by air". More generally, consolidation refers to the process by which soils change volume in response to a change in pressure, encompassing both compaction and swelling.