For many years Reinforced Earth has been an alternative to the conventional retaining system. Experience has been gained in many soil types across the United States. The result has been the development of reinforced earth backfill specifications that provide for granular backfill properties in most soils. The performance and problems of a project that uses fine-grained residual soils as Reinforced Earth backfill are documented in this paper. Fines and moisture content caused strength reductions, which resulted in wall deformations. A thorough investigation was conducted, including extensive laboratory testing. Test results demonstrate the reduction in strength with increased fines and water content. The design strip pull-out capacities in fine-grained residual soils and coarse-grained highly micaceous soils are sensitive to variations in the amount of fines and water content. Strict quality control is necessary during construction of any earth structure in these soils.(Author)