The thermal s t a b i l i t y of s o i l has been recognized a s an important f a c t o r governing t h e r a t i n g of underground power cables. Several s t u d i e s have suggested c r i t i c a l property values t h a t can be used t o p r e d i c t s o i l thermal s t a b i l i t y . The p r e s e n t study p r e d i c t s a two-stage drying process t h a t occurs i n s o i l . The f i r s t s t a g e i s c h a r a c t e r i z e d by a decrease i n moisture content u n t i l a c r i t i c a l value i s reached. I n t h e second s t a g e , t h e drying occurs more r a p i d l y , eventually leading t o a high thermal r e s i s t i v i t y l a y e r surrounding t h e cable. The second s t a g e produces a "thermal runaway" condition which has been c l a s s i f i e d as a thermally u n s t a b l e s o i l . The paper d e s c r i b e s t h e r e s u l t s of a computer program t h a t s o l v e s t h e t r a n s i e n t form of t h e conservation equations i n r a d i a l coordinates. The program i s applied t o t h e s o i l surrounding t h e cable i n order t o p r e d i c t t h e l o c a l instantaneous temperature and moisture content. The r e s u l t s are then used t o p r e d i c t those s o i l p r o p e r t i e s and cable operating conditions which w i l l produce s t a b l e and u n s t a b l e behavior. The program i s capable of p r e d i c t i n g drying rates and t h e time a t which thermal i n s t a b i l i t y w i l l occur. The r e s u l t s of t h e program are compared w i t h two s e p a r a t e experimental s c a l e laboratory tests. The experimental r e s u l t s show t h a t t h e p r e d i c t i o n of thermal i n s t a b i l i t y can be a c c u r a t e l y achieved with s m a l l diameter h e a t sources. Therefore, it i s n o t necessary t o perform simulations on f u l l s i z e c a b l e systems.