The characteristics of the development of plastic strain and the process of unstable failure for embankment of heterogeneous soils are studied with the strength reduction FEM. The unstable mechanism for embankment is analyzed according to the stress field of unstable state and formation of the critical slip surfaces. The results indicate that the strength reduction FEM is applied to stability analysis of embankments of heterogeneous soils in the theory and numeric simulation. Furthermore, the numerical non-convergence of FEM global equilibrium and displacement can be taken as a failure criterion of embankment slope.