ABSTRACT Based on the fundamental experimental properties, the author presents a new theory of plastic shear deformation of granular materials. The theory involves (a) yield function, (b) plastic potential, (c) stability condition and (d) deformation rule. The yield function is defined by the author’s new state function SS. The plastic potential φ is provided for the drained shear and the undrained shear. The stability condition can uniquely classify a experimental stress path into ‘stable yielding’ or ‘unstable yielding’ in terms of the functions of SS and φ.