Laboratory characterization of subgrade soils and unbound granular materials is an essential component of the Mechanistic-Empirical Pavement Design Guide (Pavement ME). The design thickness and performance of a pavement structure are highly dependent on the deformation behaviour of subgrade and granular material. Specifications for granular materials vary among transportation agencies based on the availability of materials, climatic conditions, and function. Specifications aim to provide durable materials that meet design requirements and achieve the target design life with cost effective materials. The objectives of the research are to: • evaluate resilient modulus of typical fine-grained soils under traffic loading. • evaluate resilient modulus, permanent deformation, and permeability of typical unbound granular materials. • evaluate the effect of moisture and fines fraction on the performance of unbound granular materials and subgrade soil. • develop prediction models for resilient modulus to improve reliability of Level 2 inputs in the Pavement ME. • provide test data in support of updating Manitoba Infrastructure and Transportation specifications for unbound granular materials to improve the performance of pavement structures. Resilient modulus tests were conducted on three types of subgrade soil (high plastic clay, sandy clay, and silty sand/sandy silt) at four levels of moisture content. Resilient modulus, permanent deformation and permeability tests were conducted on six gradations representing two types of granular material (100% crushed limestone and gravel) at two levels of moisture content. Prediction models were developed for resilient modulus and compared to the models developed under the Long Term Pavement Performance program. The proposed models provided more reliable predictions with lower root mean square error. The deformation behaviour of the granular materials was classified according to the shakedown and dissipated energy approaches. Among the tested fines contents, limestone and gravel materials with optimum fines contents of 4.5% and 9%, respectively, had better resistance to plastic deformation and higher resilient modulus. The dissipated energy approach can be used to determine the stress ratio for the boundary between post compaction and stable zones from multistage triaxial testing. Result of permeability tests showed that the hydraulic conductivity of unbound granular material increased as the fines content decreased.