Abstract: The Shanghai grey clay in raw condition of the fifth layer is in the layer of changing hinge and underground overpast engineering of orbit trafficking station in Shanghai and excavated construction of special deep foundation pit. Experimental study on the deformed localization and the law of the formation of shear bands to this clay is helpful to deeply understand the fundamental mechanical characters of it and provide some significantly directory conclusion for engineering practice. We utilize the plane strain compression apparatus and through the analyzes on the results of consolidated undrained plane strain compression tests on grey clay of the fifth layer in Shanghai, some laws of formation of shear bands and deformed localization are presented quantitatively and the internal relations between formation of shear bands and its yields in clay are discussed.