Poor performance of rail roads is often associated with the loss of cross level, track profile and track alignment. The initial as placed condition of ballast and its engineering behaviour govern the stability and the performance of a railway track. The load bearing capacity of ballast and its short and long term degradation characteristics can only be studied using large scale testing equipment, because the conventional geotechnical equipment cannot accommodate the relatively large aggregates. Large-scale testing provides specific geotechnical knowledge on the shear strength and particle degradation of ballast, in relation to the particle size distribution. The influence of principal stress ratio on the deformation aspects of ballast is also investigated. The variation of shear strength, angle of internal friction, dilation rate and the degree of particle crushing at different confining pressures and principal stress ratios, are described by non-linear relationships that are different to conventional criteria developed for other granular materials. The University of Wollongong in collaboration with the Railway Services Australia (RSA) of NSW has initiated a major research project on railway ballast, where both static and dynamic testing of ballast are being conducted. The settlement characteristics of railway ballast were also studied in the laboratory, by simulating the correct axle loads of trains. The static behaviour was evaluated using a large scale triaxial apparatus and consolidometer, while the dynamic behaviour was investigated using a cubicle triaxial rig. The role of particle degradation, number of load cycles and the degree of wetting is discussed in relation to the settlement.