Two 2.8-ha tracts lay side-by-side on a slope in East Texas. The slopes range from 7.5% in the NE to 3.5% in the SE for the upper tract, and from 6.5% to level for the lower tract. The soil on these two tracts is the Kurth series with fine sandy loam in the surface 75 cm depth with permeability about 1.5-5.0 cm/hr. The upper soil is underlain by a sandy clay loam at about 75-125 cm deep with permeability as low as 0.015 cm/hr. It is the most erodible soil in the area and is covered by mature southern pines with scattered hardwoods. In 1990, the soil on the downslope tract was excavated to convert the entire area into a level ground. The excavation, except a narrow strip of 0.60-1.50 m wide adjoining the east side of the upslope tract, exposed a vertical cut-off of soil about 1.20-1.50 m deep and 275 m long. Following the excavation, a landscape-timber retaining wall was installed along the cut-off bank to control the soil erosion. The soil excavation and wooden retaining wall altered the surface and subsurface runoff patterns and imposed tremendous effects on the soil and water balance of the adjoining upslope tract. As a result, severe water erosion, appearing as depressions, sink holes, hollows under the ground, and gullies, occurred along the east boundary line of the upslope tract. This erosions were westward from the retaining walt, passed through the property line, and extended into the upslope tract. There were 17 hollow sites beside the retaining wall, ranging from about a meter to 24 m wide (north-south direction). The longest erosion site had extended 25 m long (east-west direction) inside the upslope tract. Undercut erosion occurred at a rate of about 15 cm/yr, or deeper, on many sites. In order to prevent the upper tract from further deterioration, effective erosion control measures and rehabilitation programs need to be implemented on the retaining wall and around the boundary.