Abstract: Based on the properties of water sensitivity and microstructure of loess, the present study investigates the variation laws of macro mechanical response and microstructure of loess during the process of water infiltration. Tests of the macro mechanics and microstructure of loess with different amount of water content are conducted to explore the stress & strain response laws of the loess affected by water as well as the microstructure change of loess on the shearing surface. The results indicate that the stress-strain curve of the loess Q3 in the study area transforms from strain softening to strain hardening with the increase in confining pressure but it transforms from strain hardening to strain softening with the increase in water content. As a result, this study concludes that the corresponding strain value of the studied loess structure yield Sigma K(σk) is generally less than 2%. Additionally, steady state parameters and boundary surface parameters are obtained from the tri-axial undrained consolidation shear test of the saturated loess Q3. Meanwhile, the approximate pro interface formula is obtained with the hypothesis of stable convergence state under different confining pressures. Failure modes of the loess Q3 under different degree of confining pressures and different amount of moisture content are analyzed and it is found that the change in the microstructure of loess samples before and after being sheared is characterized by transformation of microstructure, pore content decrease and micro fracture development.