This study explores the mechanism of the undrained response of tunnelling through spatially variable improved soil. It is found that spatial variability produces a more realistic failure mechanism compared to that produced by the conventional homogeneous assumption. The overall failure of the improved ring through which the tunnel passes occurs when four or more localized plastic hinges are fully formed. The radial line average strength traversing the cement treated soil surrounding the tunnel changes along the circumferential direction (from crown to invert) because of spatial variability. The locations of the local yield zones are found to correspond to minimums of radial line average passing through the improved ring and the mobilized strength is approximately equal to the 4th minimum of the radial line average in 70% of the cases. A closed-form probabilistic model based on this “4th weakest path model” is proposed to characterize this relatively complex failure mechanism. Random finite element analyses are only required to calibrate this probabilistic model of the mobilized strength. The practical outcome of this paper is to provide a rational method of estimating the characteristic strength that is consistent with both the statistics of the point strength and the mechanics of failure in a spatially variable improved ring.