The long-term performance of pavement structures is heavily reliant on the sustained load-carrying capacity of the subgrade soil. Under repetitive traffic loads, permanent deformation (PD) gradually accumulates in the subgrade due to plastic yielding and soil particle rearrangement, which can compromise the serviceability and durability of overlying pavement layers. This study aimed to enhance the understanding of compacted clay response under long-term cyclic loads through a systematic repeated load triaxial (RLT) testing approach. The proposed approach considered depth-dependent static and dynamic stresses exerted on compacted clay beneath pavement structures and traffic loads. A series of RLT tests were conducted to investigate the impact of key factors, including soil properties (moisture content and compaction degree), stress conditions (confining pressure and deviator stress), and load characteristics (load duration and rest period), on the PD behaviour of compacted clay subgrade. Stress-strain hysteresis loops and damping ratios were analyzed to enhance the fundamental understanding of subgrade PD evolution. The results showed that higher moisture content and lower compaction degree significantly increased PD, with the PD response transitioning from plastic shakedown to plastic creep. Greater deviator stress also exacerbated PD accumulation. Variations in loading duration and rest period influenced the PD behaviour, demonstrating the importance of accurately simulating the stress history experienced by subgrade soil elements under traffic loading. The findings provide valuable insights to optimize subgrade design and implement performance-based management of pavements.