Use a rear-tine rotary tiller to loosen the top few inches of the yard soil. Roto-tilling is one of the easiest ways to loosen soil in the yard because the tilling machine performs the hardest work for you.
Break apart large pieces of clay using a shovel, hard-tine rake or your hands. Any lumps of clay that are three to four inches in diameter should be broken into smaller fragments.
Add a layer of dry, organic material, such as dry leaves, wood chips or straw, to the tilled area. Using the rotary tiller, till the dry material until it is blended into the soil completely.
Place a one- to two-inch layer of top soil onto the area you are working. Till the top soil into the ground with the rotary tiller until the top soil, dry materials and clay soil are well mixed.
Lower the deck of your lawnmower and mow grass as short as possible.
Place a layer of newspaper two-sheets thick on top of the area you want to fix. Using a watering can or a garden hose with a sprinkler nozzle attachment, wet the newspaper until it is completely damp but not saturated.
Place a one-inch layer of topsoil across the newspaper so that it is completely covered. Cover the soil with a layer of organic compost. This layer of compost does not need to be very thick, but should evenly cover the topsoil that is in place.
Add a layer of natural straw, not hay, to the top of the compost. Hay often contains weeds which will contaminate your yard with unwanted growth, so natural straw should be used instead. Water the layered materials with the hose or watering can until they are soaked through.
Repeat steps beginning with the newspaper until the layers reach a height of approximately six to eight inches. Water the area often to keep the layers wet as they break down and decompose into the soil. This process will take about four to six months to complete, depending on outside temperatures.
Clay Soil Removal
Use a shovel to dig out a section of soil that is six to eight inches deep. Remove the soil from the site as it is no longer needed.
Place a one- to two-inch layer of dry organic materials into the hole.
Fill the hole using topsoil. Use enough soil to create a small mound after the hole has been filled so that as it rains and the soil settles, it will even out with the rest of the yard.