Most hydro-mechanical models for unsaturated soil models require shear strength characteristics of the soil in order to determine the pertinent model parameters. Moreover, one needs to know the shear strength of unsaturated soils when dealing with stability problems in engineering practices. Because matric suction affects the shear strength of unsaturated soils, a suitable apparatus must be capable of imposing and/or measuring suction during tests. Shear tests on unsaturated soils are usually performed using the axis translation technique. This method covers a low range of matric suctions that corresponds to relatively high degrees of saturation for fine grained soils. Thus, it is essential to develop new techniques to extend the range of suctions for these soils. In this study, a modified direct shear device is introduced that uses the osmotic method to impose the desired matric suction. A polyethylene glycol (PEG) solution is circulated all around the bottom of the soil sample to impose the suction, and a semi-permeable membrane is introduced between the soil and the PEG solution that permits water swap but prevents the PEG macromolecules from crossing the membrane. Using this technique, the suction is controlled and kept constant during the test. The special shear box design described in this paper minimizes the potential for membrane rupture during the test. Shear stress, as well as the vertical and horizontal displacement, is recorded using an auto-logging device. The suitability of the apparatus to perform direct shear tests at relatively high suction values is investigated via tests carried out on Shiraz silty clay. In these tests, soil specimens are subjected to suctions of up to 800 kPa during shearing. The results indicate that the shear strength and shear induced dilation of the soil samples increase with suction.