Abstract: The current design of heavy-haul railway subgrades in China generally adopts a quasi-static approach and does not account for the evolution of permanent deformation during long-term service, making it difficult to satisfy the requirements for operational safety and subgrade durability under future higher axle-load conditions. This study examines the spatial distribution and influence depth of dynamic stress in heavy-haul railway subgrades, and proposes a working-zone depth model together with a structural thickness design method that accounts for stress penetration. A self-developed testing system capable of simulating principal stress rotation was employed to investigate permanent deformation under three-dimensional stress conditions. Based on shakedown theory and deformation rate analysis, critical dynamic stress thresholds associated with different deformation states were identified, and a quantitative relationship with the K30 foundation coefficient was established to derive strength-control equations for subgrade layers. A mechanics–empirical design framework incorporating dynamic stress influence depth and permanent deformation was then developed and benchmarked against existing methods. Results indicate that current specifications underestimate subgrade bed thickness and fail to maintain a dynamic-to-static stress ratio below 0.2 at its base. Compared with conventional approaches, the proposed method yields a thicker, stronger subgrade bed and a thinner, less compacted embankment. Using the proposed method, the overall height of a heavy-haul railway subgrade designed for a 25 t axle load is reduced to 5.5 m (compared to 6.0 m in the current specification), while the overall subgrade height remains essentially unchanged for design axle loads of 27 t and 30 t. This framework provides a scientifically grounded basis for improving heavy-haul railway subgrade design.