Muzhailing tunnel of Lanyu railway is located in the western part of Qinling Mountain, its geological conditions are very complex. There is an extrusion fault, f16, in the Dazhangou inclined shaft, and the strata are consist of slate, sandston and carbonaceous slate. The measured geostress results showed that this location is in a very high level of geostress state, the maximum horizontal principal geostress is nearly vertical to Dazhangou inclined shaft and the measured horizontal lateral pressure coefficient is 3.79. Soft rock crushing, high geostress state, high horizontal lateral pressure coefficient and other factors led to the poor stability for the shaft. During the construction process of the shaft, the deformation characteristics are showed as strong horizontal deformation, rapid and large rate initial deformation, and long duration. According to rock lithology conditions, geostress conditions, supporting structure and dynamic construction, deformation characteristics of the shaft, the large horizontal deformation was caused by the interaction of high horizontal lateral pressure coefficient and poor geological conditions and other factors, but the main reasons of the large horizontal deformation were recognized as uneven vertical and horizontal load, extreme adverse load conditions of support structure, based on the theoretical and 3D numerical analysis. Through the analysis of the interaction of support structure and the surrounding rock, the smaller deformation in front of the working face during tunnel excavation is took place, the less stress release would be took place and the larger the ultimate load would be on the support structure. Tremendous stress was withstood by the arch crown, larger wall tensile stress was appeared at side wall, the support structure is in a poor stress state. This paper provides a theoretical basis for dynamic design and construction of the Dazhangou inclined shaft and Muzhailing tunnel.