Soil nailing has been used extensively as an in-situ reinforcement technique in many parts of the world. The design and analysis are essentially based on limit equilibrium methods (Gassler and Gudehus, 1981; Juran, 1985). One of the important aspects of the analysis of in-situ earth reinforcement is in understanding the behaviour of soil-nailed retaining walls. In a soil-nailed retaining wall, the properties and material behaviour of three components—the native soil, the reinforcement (nails) and the facing element—and their mutual interactions significantly affect the performance of the structure. The behaviour of reinforced soil walls can be understood to some extent by studying the state of stress within the reinforced zone (Rowe and Ho, 1996). In addition, various factors such as the construction sequence, the installation of nails, the connection between the nails and the facing are likely to influence the behaviour. These influences are not adequately addressed in the conventional design procedures based on limit equilibrium methods, with which the wall in the present study was designed. Hence, for a better understanding of the behaviour, it is necessary to assess the stability and performance of soil-nailed walls using numerical simulations.