The water retention curve (WRC) defines the relationship between matric suction and saturation and is a key function for determining the hydro-mechanical behavior of unsaturated soils. We investigate possible microscopic origins of the water retention behavior of granular soils using both Computed Tomography (CT) experiment and multiphase lattice Boltzmann Method (LBM). We conduct a CT experiment on Hamburg sand to obtain its WRC and then run LBM simulations based on the CT grain skeleton. The multiphase LBM simulations capture the hysteresis and pore-scale behaviors of WRC observed in the CT experiment. Using LBM, we observe that the spatial distribution and morphology of gas clusters varies between drainage and imbibition paths and is the underlying source of the hysteresis. During drainage, gas clusters congregate at the grain surface; the local suction increases when gas clusters enter through small pore openings and decreases when gas clusters enter through large pore openings. Whereas, during imbibition, gas clusters disperse in the liquid; the local suction decreases uniformly. Large pores empty first during drainage and small pores fill first during imbibition. The pore-based WRC shows that an increase in pore size causes a decrease in suction during drainage and imbibition, and an increase in hysteresis.