The plastic strain growth rate in different states can be obtained based on shakedown theory; then, the critical dynamic stress can be determined. However, this traditional method is not accurate in engineering practice because the serviceable performance is neglected. To solve this problem, a series of dynamic triaxial tests was conducted, and a method to determine the critical dynamic stress based on the plastic strain development law and serviceable performance for silt subgrade was proposed. The main conclusions are as follows: (1) Dry density and confining pressure significantly affect the evolution of plastic strain, and they show a good exponential relationship; (2) the sample preparation method remarkably affects the increase in plastic strain; then, a correction method is proposed to eliminate the differential settlements caused by multiple compaction methods; (3) compared to the traditional method, the critical dynamic stress in this study can be determined based on a lower growth rate of plastic strain, which can better satisfy the requirements of service performance in practice.