The Shannan wide valley section of the Sichuan–Tibet Railway is located in the middle reaches of the Yarlung Zangbo River, where sand hazard is severe. A wind tunnel simulation experiment was conducted by establishing a subgrade model and performing field observation to carry out research on the dynamic environment of blown sand and the sand hazard formation mechanism of subgrade in the Shannan wide valley. Observation results showed that the sand-moving wind of the Shannan wide valley was chiefly derived from the ENE direction, and the resultant sand transport direction was WSW. Wind speed, the frequency of sand-moving wind, the sand drift potential, and the maximum possible sand transport quantity were relatively high in the spring. Meanwhile, the dynamic of the wind-blown sand flow was further enhanced in the spring, particularly influenced by the flow action of the Yarlung Zangbo River. Thus, sand hazard mainly occurred in the spring. The Sichuan–Tibet Railway subgrade evidently changed the wind speed, the wind-blown sand flow field, and conditions of transport and accumulation. Within the distance of 5 times the model height in the windward direction and at the subgrade top center to 20 times the model height of the leeward direction was the wind speed deceleration zone, resulting in sand particle sediments. A wind speed acceleration zone appeared on the subgrade windward slope shoulder, resulting in wind-blown sand flow erosion. This study provides a scientific basis for sand hazard prevention and control in the Sichuan–Tibet Railway.