Abstract: The permeability characteristics of unsaturated fly ash play critical roles in the stability of ash dams under rainfall conditions. However, the mechanisms and effects of this influence remain incompletely understood. Using the Zhijin ash storage site in Guizhou as a case study, the TRIM experiments were conducted to obtain the soil-water characteristic curve (SWCC) of fly ash in the low suction range, and the theoretical analysis was employed to predict the SWCC in the high suction range. The van Genuchten-Mualem model was applied to estimate the permeability coefficient of unsaturated fly ash. FLAC^3D software was then used to simulate and analyze the dams pore water pressure, saturation, displacement, stress, and potential sliding surfaces during rainfall infiltration. The results show that rainfall intensity significantly affects the infiltration depth and the extent of the saturated zone within the dam, which in turn alters the position of potential sliding surfaces. Displacement is most pronounced at the dam’s toe, with continued rainfall leading to a progressive “onion-peeling” pattern of slope failure. However, the impact of rainfall on the dam’s stress is minimal, suggesting that the increased displacement may primarily result from the degradation of soil properties. These findings provide new insights into the evaluation and prediction of ash dam stability.