This paper addresses the cyclic behaviour and stiffness degradation of subgrade soils subjected to stress-controlled cyclic loading, with particular emphasis on soils that are prone to mud pumping or subgrade instability. With continuous passage of trains over weak, saturated, low-plastic subgrade foundations, the finer fraction of the soils tends to fluidise (i.e., behave like a fluid) and migrate upwards, thereby, fouling the ballast and hindering the long-term performance of the rail track infrastructure. This leads to significant costs associated with annual track maintenance. Through a series of undrained cyclic triaxial testing varying the cyclic stress ratio (CSR, representing the axle loads) and loading frequency (simulating train speeds), the authors noted a significant upward migration of finer fraction coupled with internal moisture redistribution within the failed specimens. Further analysis revealed the instability of specimens was caused by early softening behaviour, and it is accompanied by a sharp reduction in the specimen stiffness. To tackle this, the stiffness was evaluated in terms of axial dynamic modulus and strain energy per cycle was evaluated to better understand the fluidisation behaviour. A novel quasi-linear relationship between threshold residual strain and number of cycles is proposed to serve as a practical guide.