Summary: Asphalt rubber has been utilized for many years as a Stress Absorbing Membrane (SAM) or Stress Absorbing Membrane Interlayer (SAMI) for both rigid and flexible pavement overlay systems in Arizona with satisfactory performance. In 1977, a new experimental application of asphalt rubber was used to build a low volume highway pavement between Dewey and Interstate 17 on Highway 169. Several experimental pavement sections were placed. After four years of service only two sections are still in excellent condition with not cracks or ruts observed to date. One section consisted of cement treated base, the other lime-fly ash treated base. Each section received a SAMI and a one-inch wearing course. Other test sections failed and constant patching is required to maintain a minimal level of service. Generally, cement treated bases will always have shrinkage cracks which easily reflect through any asphalt concrete surface layer if without special treatment to retard crack propagation. A Finite Element procedure was utilized as an aid in explaining why a SAMI can by used effectively to eliminate reflective cracks. It was found that SAMI’s can significantly reduce crack tip stresses due to thermal and traffic loads and provide longer service life of the asphalt concrete surface layer.