This paper presents the results of two-way cyclic lateral load tests conducted in the laboratory on the model pile groups embedded in soft clay. The purpose of this research work is to investigate the effects of spacing, number of cycles of loading and cyclic load level on the pile group behaviour in clay. A pneumatic system is used to simulate cyclic loading typical of wave loading. Similitude laws are adhered to in selecting the material and size of the model piles. Piles are instrumented so that bending moments developed along the piles can be calculated. The results emphasized highly nonlinear nature of load-deflection behaviour. Group interaction effect under cyclic lateral loading is predominant for groups with spacing to diameter ratio less than 7. It is found that the cyclic load levels exceeding 0.5 times of static ultimate capacity, produce large deflections of the pile group due to gaps developed at the pile-soil interface, remoulding of clay and subsequent reduction in the stiffness. The bending moments in the piles are increased with the number of cycles and the location of maximum bending moment shifted downwards along the length of the pile. Numerical analysis using software - GROUP is also carried out for closely spaced pile groups subjected to static lateral loads and the results are compared with the experimental ones.