By taking advantage of the directional statistics and DEM simulated tests, diffuse instability in the 2D granulate assembly of circular particles was thoroughly investigated with particular attention paid to the microstructural origin for triggering this collapse. Hill’s stability postulate and criterion were employed during the micromechanical analysis. A Stress rate Force Fabric (SrFF) function and a Strain rate Displacement Fabric (SrDF) function are firstly derived, based on which a micro-structural second-order work is pursued for 2D granular systems. It is recognized that rate of contact density( mv), evolution of microstructure anisotropy (Ν2D ) characterizing both contact and contact forces networks, and variation of directional average normal contact force (f n0 ) are the three microstructural variables of the second-order work and therefore characterize the onset of diffuse instability. Numerical simulation results further indicate that or the rate of fabric anisotropy in the strong sub-network (a cs ) dominates the capability of shear resistance and can be used to predict the onset of diffuse instability with the assistance of the loading direction. However, f n0 is related to the rate of fabric anisotropy for the weak sub-network(a wc ), whose degradation is found to be microstructural origin for diffuse instability. Moreover, the initiation of static liquefication occurs when f n0 ≈0 and the collapse of the weak sub-network is always accompanied by a drastic decrease in contact density or coordination number which is frequently observed during diffuse instability.