When the sand compaction pile (SCP) method is implemented to improve loose deposits of sandy soils, its effect is evaluated generally in terms of increase in density, which is beneficial for reducing the liquefaction potential of the deposits during earthquakes. An additional advantage can be expected to occur due to concurrent increase in lateral stress. When the resistance to liquefaction is evaluated on the basis of SPT N-value or CPT qc-value, the increased resistance to penetration due to the sand compaction has been interpreted conventionally as being associated mainly with the increase in density. Therefore, in order to properly evaluate the effectiveness of ground improvement in compacted soils, it is necessary to quantify the effect of lateral stresses on the penetration resistance and liquefaction strength. In this paper, based on the results of SPT and CPT performed in a chamber box in the laboratory, the relationships between penetration resistance, liquefaction resistance and relative density were re-examined and the influence of lateral stress, expressed in terms of KC, was investigated. Although the results indicated that generally the resistance to liquefaction increases with increasing KC–value, little difference was noted when the density of the deposit was high. Based on the results, recommended charts incorporating the effect of KC were proposed.