Experiments are conducted to investigate leakage through circular GMB holes overlain and underlain by both tailings with various hole diameters and GMB thicknesses. Finite element analyses are performed to explore the effect of hydraulic conductivities (k) of subgrade (underliner) and tailings above the GMB (overliner) on water head contours dissipation. An analytical solution is developed for predicting leakage through circular GMB hole overlain and underlain by both tailings. Results show that the effect of subgrade on leakage is highly dependent on the ratio of k between the underliner and the overliner. If the ratio >100, no head loss occurs in the subgrade; if the ratio <0.01, all the head loss occurs in the subgrade. With the deposition of fines from overliner into subgrade, a low permeable filter cake is formed on the subgrade surface, notably increasing the impact of underliner on leakage. With the increasing ratio of k between underliner and overliner from 0.01, 0.1, 1, 10, and to 100, the ratio of leakage relative to a highly permeable subgrade increases from 0.01, 0.1, 0.56, 0.93, and to 1. An intimate interface contact can be achieved when the GMB is underlain by silty sand tailings as subgrade (foundation) material.