A mine waste slope that had failed previously was cut back and stabilized with soil nails. The lower section of the slope was steepened from 1H:1V to about 1H:3.7V, and the slope was monitored with slope inclinometers. To evaluate the load transfer process in the nails during the excavation of the lower slope, a finite element analysis was conducted. A typical 3-D section of the slope was analyzed, with the width equal to the horizontal nail spacing. Staged material property replacement and removal of elements was used to simulate the construction and excavation process. The analysis results were compared with slope inclinometer data from the field site, and the axial nail forces were evaluated. The build up of tension in the nails was represented in the model. To observe the load transfer mechanisms as failure was approached, a surcharge loading was then incrementally applied on the top of the finite element model of the slope. The results suggest the development of a yield zone leading to a global failure of the slope.