Abstract: Lan-Yu railway line has the Tertiary sandstone as the subgrade foundation. The sandstone has the characteristics of muddy weak cementation, unbound, low intensity, and shows water instability properties. It is very complicated in construction. Water content can increase significantly with the excavation of underground chamber. Plastic deformation and rheology, and stability of surrounding rock mass can rapidly vary, which can cause the sandstone structure damage, the inflows of water and sand, and other engineering geological problems. This paper uses the rock test, SEM and exploration of loose circle testing methods. It explores the groundwater seepage conditions and stress state of surrounding rock. The change due to rock microstructure change is the main mechanism of the softening and deformation.