In view of the stability of shallow shield tunnel excavation under seepage conditions in sandy ground with clay, a test equipment was designed and established, which mainly consists of model box, water circulation system, shield tunnel and excavation face model, saturated stratum model, and measurement system. Based on model tests, the ground settlement, saturated earth pressure, and pore water pressure in front of the tunnel were measured in the process of gradual instability of the tunnel face. Results show that under the seepage condition, the pore water pressure in front of the tunnel face increased with the increase of the clay content in soil and the volume loss of the tunnel face. Seepage could evidently increase the limit effective earth pressure at the tunnel face. The limit effective earth pressure increased linearly with the increase of clay-sand ratio. The limit collapse range of the soil was mainly dependent on the rupture angle in front and rear of the tunnel face and the transverse rupture angle, in which the rear rupture angle was not much affected by the clay content in soil and seepage. Under the condition of no seepage, the limit collapse range of the soil increased with the increase of clay-sand ratio, while under the condition of seepage, the limit collapse range of the soil decreased with the increase of clay-sand ratio. The research results improved the understanding of the stability of shallow shield tunnel excavation under seepage conditions in sandy ground with clay, which can provide reference for practical engineering and limit analysis of stability.