The construction of two 40m high embankments on Izmir-Cesme Motorway was completed in 1992. 20m high-reinforced earth walls supported the downstream slopes of the embankments. Highly weathered clayey schists excavated from adjacent cuts were used in the construction of both the embankments and reinforced earth walls. Continuous vertical deformations were observed on the embankments that reached to 70cm in 1998. Lateral displacements at the crest of walls were in excess of 60cm. These magnitudes of deformations led to a prefailure state in the embankments and rupture of connections of reinforcements to panels of the walls. A detailed site exploration program was undertaken to determine the causes of these deformations and local failure of the walls. The findings indicated that grain crushing and degradation of the soft rockfill caused the excessive settlements. Degradation of the fill material caused a significant reduction in the friction angle of the fill material and increased the lateral earth pressures on the reinforced earth structures.