To study the mechanism of gravitational erosion, pre-treatment program for modeling of complex multilayered terrain using fish language was compiled and the modeling was developed secondly. The finite difference software Flac3D was used to study the mechanism of gravitational erosion, to analyze the development process of gravitational erosion, and to numerical simulate on displacement field and stress field of small watershed in Loess Plateau concerning on the mechanical stabilization. The results showed that the three-dimensional model established could factually demonstrate topography and geomorphology of the small watershed and had good simulation effectiveness. The process of gravitational erosion was divided into three stages, the development stage, maturity stage and stable stage. Gravitational erosion of the traceability area was the most serious; the geometric shape of concave slope conductived to the stability that slowing down the occurrence degree of gravitational erosion. The modeling method and numerical simulation results could be applied to study gravitational erosion that offer scientific basis for the deeply promoting the development of erosion and sediment yield time-space law and comprehensive controlling soil erosion of small watershed and constructing the ecological environment.