This paper investigates the effect of particle shape on the stress reduction and collapse deformation of gravelly soil using a medium-scale direct shear test apparatus under different relative densities, normal stress, and shear stress levels. A new method based on the Micro-Deval test was introduced to produce sub-angular particles from angular particles. Therefore, two series of soil specimens were obtained with the same rock origin, particle size distribution, and relative density but different particle shapes. In addition to traditional direct shear tests on dry and wet specimens, a specific test procedure was applied to explore the stress reduction and collapse of soil specimens due to wetting. The results of the tests, including shear stress–shear displacement and vertical displacement-shear displacement, were compared. The results showed that the stress reduction and settlement due to wetting increased with vertical and shear stress levels in both types of particle shapes, with higher values in angular particle shapes. The particle breakage of the soil specimens was also studied quantitatively using the change in the particle size distribution before and after the test. It was shown that the wetting of the samples had more impact on the particle breakage in angular gravel than sub-angular gravel, which increased linearly with the normal stress.