This paper describes the instability in the foundation of the Caudalosa tailings dam in Peru. The instability threatened collapse of the structure along with the risk of unacceptable contamination of the River Escalera, located immediately downstream of the toe of the dam. At the time of these investigations, large deformations were in progress. The head scarp of the potential slide, located in the stored tailings, had reached a height of 2 m. Visual observations, as well as subsurface investigations, indicated that the instability was due to the presence of soft to medium plastic clay in the foundation. Emergency stabilization was successfully achieved by the construction of large trenches at the downstream toe, allowing the low consistency clay to be removed and backfilled with compacted mine waste rock. Other secondary stabilizing measures that were undertaken are also described.Key words: clay, dam, instability, remediation, stabilization, slide, tailings.