Wellbore collapse frequently happens in clay shale formation due to its strong hydration. Numerous studies on clay shale hydration have been conducted to find an effective method to evaluate and control hydration damage so that wellbore instability can be reduced. It is well-known that hydration damage can cause dramatic changes to shale structure, leading to the modification of clay shale acoustic properties. Acoustic property is a common geophysical parameter and is widely used in petroleum engineering. Therefore, in this paper, considering acoustic time-frequency domain characteristics in the hydration process, a new hydration damage variable has been established. By using this hydration damage variable, influences of hydration damage on shale structure, acoustic and mechanical properties have been discussed. Results demonstrate that, with increasing soaking time, hydration damage becomes stronger, forming fracture initiation and propagation. These increase void space producing more acoustic refractions, reflections and scatterings in the acoustic wave propagation through a shale sample. Consequently, acoustic amplitude and frequency both show a decline. This evolutionary process of hydration damage has three stages, which are; the initial stage with a slow increment, a middle stage with a rapid increment and a later stage with stabilization. Meanwhile, stress-strain curves in hydration damage evolution show that hydration can decrease shale compressive strength and brittleness, increasing shale plasticity. This paper proves that the new damage variable is practicability, giving a new method for hydration damage evaluation in oilfields. Theoretical findings in this paper can offer guidance for drilling operations in clay shale formations.