Highly unstable soils are common in many parts of the world. In recent years, traditional chemical admixtures such as cement, lime and fly ash were used for stabilising these soils. However, not all chemical stabilisers are readily acceptable due to stringent occupational health and safety issues and invariable change of soil pH that often limits the scope of vegetation plus imposing a threat to ground water pollution. However, recent research shows that lignosulfonate, an environmentally sustainable admixture, can stabilise unstable and erodible soils without causing adverse effects on the environment. This paper presents the results of a laboratory investigation and model predictions on the internal erosion behaviour of an unstable soil stabilised by lignosulfonate. Test results reveal that the erosion parameters such as the critical shear stress and coefficient of soil erosion were improved with the increased amount of lignosulfonate. A theoretical model has also been developed to capture the internal erosion behaviour of soil based on the law of conservation of energy. The stabilization of the soil particles by lignosulfonate treatment is characterized by the increased strain energy required to break the inter-particle bonds. The model predictions capture the internal erosion behaviour of lignosulfonate treated soil similar to the laboratory experiments.