Taksim–Kabatas¸ Funicular System Project is planned to integrate the metro system and sea transportation routes by connecting the Taksim Station of the Metro System and the Kabatas¸ Sea Bus Pier. The system is also connected to the tramway line in Meclis-i Mebusan Street. The funicular system consists of two cut and cover underground stations and a deep tunnel with 5 to 22% inclinations and 544m length. In this paper, the unfavorable geological conditions at the tunnel entrance, the results of the subsequent soil improvement works and their effects on the tunnel deformations are presented in detail. Approximately 2500m³ artificial fill was treated with an average of 0.97 t/m³ grout intake. Thanks to the soil improvement, the tunnel was bored safely and without any damages to buildings.