An area badly affected by tunnel-gully erosion was selected on the Port Hills, Christchurch, and sampled at several profiles. Recognised methods were used to determine the degree of clay dispersion caused by high exchangeable sodium levels, and techniques were devised to measure the swelling and slaking properties of the soil. The results obtained indicate that while both dispersion and slaking are the probable causes of aggregate breakdown, cracking resulting from desiccation of the soil is a major factor in the initiation of tunnel-gully erosion.