study in South East Queensland has found that a large percentage of thin surfaced flexible pavements exhibiting moderate to highly nonlinear subgrade behavior. The nonlinearity effects are major problems encountered in back-analysis of this group of pavements and it can yield back-calculated results with superficially high subgrade stiffness modulus and extremely low stiffness modulus at the road base layer. In other cases, the back-calculation yields very high asphalt stiffness and very low subgrade stiffness modulus. Back-analysis of the falling weight deflectometer bowls can be used to estimate the stiffness modulus of the subgrade from software packages such as EFROMD2. Occasionally, EFROMD2 does not converge mainly because of the certain actual material behavior cannot be handled by the elastic layer model in CIRCLY that is used in EFROMD2. A research has been carried out to analyse the back-calculated results of EFROMD2 and CIRCLY5 for pavement structures that possess highly nonlinear subgrade behavior. The study shows that the EFROMD2 computer program over predicts the asphalt stiffness and under predicts the subgrade stiffness. On the contrary, CIRCLY5 program generates back-calculated results with very high subgrade stiffness and very low stiffness modulus in the road base layer. The issues pertaining to the back-calculation of flexible pavements that posess highly nonlinear subgrade behaviour is presented. A simple approach to compute the degree of subgrade nonlinearity will be introduced.