A series of finite element analyses, conducted on the basis of modified triaxial tests incorporating radial drainage, were carried out to investigate the lateral deformation and stress state characteristics of prefabricated vertical drain (PVD) unit cells under vacuum preloading. The analyses revealed that the inward horizontal strain of the unit cell increases approximately linearly with the vacuum pressure (Pv) but decreases non-linearly with an increase in the initial vertical effective stress (σ′v0). The variations in the effective stress ratio, corresponding to the median excess pore water pressure during vacuum preloading of the PVD unit cell, were elucidated in relation to the Pv and σ′v0 using the simulation data. Relationships were established between the normalized horizontal strain and normalized effective stress ratio, as well as between the normalized stress ratio and a composite index parameter that quantitatively captures the effects of vacuum pressure, initial effective stress, and subsoil consolidation characteristics. These relationships facilitate the prediction of lateral deformation in PVD-improved grounds subjected to vacuum preloading, utilizing fundamental preloading conditions and soil properties. Finally, the proposed methodology was applied to analyze two field case histories, and its validity was confirmed by the close correspondence between the predicted and measured lateral deformation.