Deformation behaviors and soil-pile interaction are complex for the pile-supported embankment over soft clay, which may result in tension cracks between piles and soils and provide infiltration paths for rainwater. On-site investigation and numerical simulations were conducted in the study of a pile-supported embankment on soft clay with tension crack appeared. The investigation revealed the distribution and formation process of the tension cracks and structural cracks. The numerical simulation reproduced the observations of on-site investigation with a simplified width-related permeability model of tension crack and a simplified model for the distribution of crack hydrostatic pressure. The following conclusions are drawn from the study. The tension cracks appeared in the early stages of consolidation at the soil-pile interface, which mainly caused by the shearing of the soils, the earth pressure on the piles, and the soil-pile interaction under embankment loading and other surcharges. Subsequently, the structural crack appeared on the attachment structures supported by shallow foundations. When entering the rainy season, hydrostatic pressure in the tension cracks was generated under heavy rainfall which could push the piles and surrounding soils to move horizontally and cause large lateral deformations. Large lateral deformations caused structural cracks in main structures supported by pile foundation consequently. Reducing the permeability of tension cracks can avoid the generation of the hydrostatic pressure and decrease lateral deformations of the embankment significantly.