To study the seismic design of subgrade engineering, subgrade seismic damage of Wenchuan 8.0 Earthquake was investigated. Two damage types of un-reinforced road embankment under earthquake were found, including slope collapsing and pavement cracking, while there was nearly no damage to road embankment whose upper part was reinforced by geogrid. Body sliding was restrained by reinforcement on the top of the embankment with long geogrid, which prevented the fissures from developing downward, and slope collapsing was precluded by reinforcement on the upper part of the embankment with short geogrid, which restrained the lateral deformation of soil mass. According to conventional design of geogrid-reinforced road embankment, optimized seismic design was proposed. Dynamic-strength-reduction method was employed to compare the seismic performance of conventional design with that of optimized seismic design of geogrid-reinforced road embankment. The result showed that geogrid used would decreased by 23.1%, maximal seismic displacement of embankment would decreased by 19.0%, and maximal stress of geogrid would decreased by 14.1% after optimized design. Optimized design not only decreased consumption of geogrid, but also restrained the lateral deformation of soil mass, thus the seismic behaviour of road embankment improved. This study will provide scientific evidences for reconstruction of road embankment engineering in seismic disaster area.