A method called “slot and hole” was proposed for preventing the soil and water loss of sloping farmland in Loess Plateau. Due to gravity load, slop surface runoff was intercepted and stored in a hole through a slot to form a soil reservoir. By applying this method, the convergence of slop runoff was avoided, and water evaporation also decreased. The loss of soil and water was thus prevented. Some skills for application of this method were pointed out. Additionally, the design standard of “slot and hole” method was proposed. Based on the principle that the corresponding standard runoff was totally stored in the hole, the reasonable layout scheme was determined, and the relationship of the diameter of the hole to the distance between two adjacent slots was obtained. Moreover, the formatting process of the hole and seepage process were simulated by employing FEM, and then the variation laws of physical and mechanical parameters of the soil around the hole were obtained. The results demonstrated that the physical and mechanical parameters of the soil around the hole varied significantly in the area of 0.4 times diameter of the hole, and the porosity and permeability coefficient of soil decreased as the dry density and deformation modulus of soil increased. The closer the area was to the hole, the smaller the porosity and permeability coefficient and the larger the dry density and deformation modulus were. After seepage analysis, the strength of the hole decreases slightly and certain deformation occurred. 