Seasonal cycles of wetting and drying in highway subgrade soils induce corresponding cycles of soil swelling and shrinkage that contribute to roughness and loss of serviceability of pavements. The design of defensive measures to mitigate the effects of this process requires a realistic model of moisture diffusion and associated swelling and shrinkage of soil. A Windows-based two-dimensional finite element program, FLODEF, is presented; it performs a sequentially coupled flow-displacement analysis for the prediction of vertical movement in highway subgrade soils. The theoretical formulations of moisture flow and stressdeformation components of the model are introduced first. Parametric studies illustrate capabilities of the model to evaluate the effectiveness of vertical moisture barriers, horizontal barriers, soil replacement or improvement, and paved medians in reducing swellshrink deformations beneath highway pavements.