This research delves into managing the plasticity of muddy soil in earth pressure balance (EPB) shield tunneling, crucial for ensuring tunnel stability and efficient sediment management in urban construction. The study utilizes a combination of a small-scale model experiment and a computer-aided engineering (CAE) analysis through the moving particle simulation (MPS) method to investigate how the plasticity of muddy soil, adjusted by mixing excavated soil with a bentonite solution, impacts the earth pressure within a tunneling chamber. The experimental setup meticulously simulates the tunneling process, measuring the variations in earth pressure that occur in response to the different states of plasticity induced by the agitation of the muddy soil. The findings reveal that earth pressure is a reliable indicator of the soil’s plasticity, significantly correlating with the slump value and vane shear strength, thus affecting tunnel stability and the operation of machinery. The CAE analysis, underpinned by MPS, accurately mirrors the experimental outcomes, endorsing its use for assessing and visualizing the plasticity and fluidity of muddy soil in tunneling scenarios. The results of this study demonstrate that MPS-CAE analysis is an effective tool for improving sediment management strategies and optimizing EPB shield tunneling operations, highlighting the critical role of soil plasticity in ensuring tunnel face stability and project success. This research reveals that earth pressure measured by the agitation blade can serve as a reliable indicator of the plasticity of muddy soil in the chamber. This enables real-time and on-site evaluation of soil conditions during EPB shield tunneling.