The tunnel crossing active fault is severely damaged under the action of fault dislocation. Considering the “economic and safety” principle in engineering design, the tunnel damage should be effectively reduced. In this work, a two-level design method for fault dislocation was proposed and the Urumqi subway tunnel in China was chosen as a typical model to deeply investigate its application feasibility. Based on the definition of the design events of different levels and corresponding design goals, three-dimensional finite element soil-tunnel models were established to estimate the response of tunnel. Meanwhile, the rationality of soil-tunnel model was judged by tunnel deformation and internal forces distribution characteristics analysis, and the two-level design goals were evaluated by comparing tunnel damage degree and volumes. The results suggest that under the condition of fault dislocation, the tunnel without disaster mitigation method suffers severely shear, tensile-crack, and compressive damage, which may eventually induce the tunnel collapse. The tunnel damage is reduced significantly by adopting the method of flexible joint. For Urumqi subway tunnel with flexible joints, both of the two-level design goals are effectively realized.