A device and method for health diagnosis of subgrade service performance, including: a loading device, which applies a load to a road; a data acquisition device, which collects stress and vertical displacement generated by a pavement layer when a load is applied; a data analysis device, that performs a frequency spectrum analysis on a vertical displacement signal to obtain a propagation speed of a Rayleigh wave of a pavement layer and a thickness of the pavement layer, and thereby obtains an elastic modulus of the pavement layer; inputting the stress, vertical displacement, elastic modulus and thickness of pavement layer into a trained subgrade soil modulus calculation model to obtain an elastic modulus of subgrade soil; and obtaining a dynamic deformation value of the subgrade under a standard load, and evaluating a health state of the subgrade according to the dynamic deformation value.