Rheology of PVC plastisol is usually conducted with steady state flow. It is inadequate, because plastisol is viscoelastic, so that deformational experiment is also required. In the viscoelastic measurements, when either frequency or amplitude is increased, dynamic viscosity decreases first (pseudo-plastic), reaching a minimum and then, increases (dilatant). It is because the shear rate during the oscillation is a product of frequency and amplitude. The pseudo-plastic behavior is explained with stress-induced phase separation into an immobilized layer of packed particles and mobile phase of reduced particle concentration. The viscosity minimum corresponds to the yield point of the immobilized layer. The yielding obeys Coulomb's criterion. After yielding the immobilized layer dilates with the further increase of shear rate. Two different modes of fracture are observed; one without yielding occurs at rather low shear stress, slightly higher than the cohesive strength of the immobilized layer. After yielding and dilation, the fracture occurs when shear stress becomes higher than normal stress. Before yielding the deformation of the immobilized layer is very small and accompanied with small fraction of particles moving over the neighboring particles. After yielding, deformation involves entire particles of the immobilized layer.