The paper describes observed behaviour of a model tunnel embedded in dry sand subjected to cyclic ground shear deformation in a centrifuge, as well as the behaviour of the model ground during shear deformation. Detailed data on earth pressures acting on the, tunnel lining and the sectional forces of the lining are presented during ground shear deformation. The data suggest that the earth pressure at tunnel crown before ground shear deformation is smaller than the full overburden pressure probably due to the formation of arch action and the arch action may deteriorate with the cyclic ground shear deformation, resulting in an increase in the earth pressure at crown and changing the distribution of the sectional forces, which are largely influenced by conditions between tunnel lining and invert.