The Shangwan giant old landslide in Qinghai province, belonging to Upper Pleistocene series loess of Quaternary System and Guide Group mudstone of Neogene System, is a typical multi-stage rotating landslide and the sliding surfaces are mainly in the mudstone of Guide Group. Based on the full use of the materials obtained by the field landslide survey and drilling test, through analyzing the spatial position relation between key layers (loess soil and conglomerate deposits) in the landslide deposits and mudstone deposits, as well as the sliding surface morphology of the old landslide body and the sludge (dammed lake sediment) on the top of the loess, it is confirmed that the Shangwan giant old landslide body had mainly experienced two large-scale slides. And then, with the theory of groundwater dynamics, the groundwater level can be calculated before the two slides, and a numerical model of landslide deformation and destruction mechanism can be established. Combining the regional neotectonic movement characteristics, the dynamic change of underground water level, the feature of significant decrease in strength of mudstone in the saturated state and the FLAC(3D) numerical simulation results, it is concluded that the first sliding of the old landslide is mainly caused by river incision, and three stages of slope deformation in the process of the river incision are provided. The first sliding results in the steepening of slope's free face, the concentration of shear stress at the slope toe, and the formation of a dammed lake in the front of the landslide, which leads to an accumulated traction sliding caused by the rising of ground water level and the softening of the mudstone.