The behaviour of saturated soft clays subjected to cyclic loading is of considerable importance in the design of railway subgrades. Soft clays can be extensively found in many coastal regions of Australia up to significant depths, including the coastal belt and the central part of NSW. These soft clay deposits are characterised by very low bearing capacity and excessive settlement. The increase in generated excess pore pressures due to heavy freight trains significantly reduces the bearing capacity and causes serious damage to the rail infrastructure such as clay pumping underneath railway tracks and excessive subsidence. The use of prefabricated vertical drains (PVDs) is one of the popular methods for soft ground improvement. In this paper, the behaviour of soft clay subjected to cyclic loads is investigated using large-scale triaxial tests. Cyclic triaxial tests on remoulded soft clay samples with and without vertical drains have been carried out using a large-scale triaxial apparatus designed and built at the University of Wollongong. It was found that the PVD under cyclic loading allows the generated cyclic excess pore pressures to dissipate during and after the cyclic load application. The extent of smear zone was approximately three times the equivalent diameter of the mandrel used during installation and is comparable to the generally accepted relationship between mandrel and smear produced under static loading. The case history at Sandgate Rail Grade Separation Project is also presented with a Class A numerical prediction. Design methodology and finite element analysis are discussed through associated settlement and lateral displacement.