Due to the recent rapid urbanization process, a large number of high and steep loess slopes have been excavated in the hilly-gully region of Lanzhou. Through field investigations, we found that most of the excavated high and steep loess slopes have many engineering geological problems of different degrees, such as unloading crannies, slope gullies, sinkholes, and local landslide collapses. Using finite element method, we simulated the excavation process, and the results show that the displacement and stress and strain fields of the excavation slope exhibit significant changes after excavation. These include stress release and local concentration, an unloading effect, the weathering and flushing action of water, and internal and external factors and their interaction, which lead to various engineering geological problems with respect to the excavation slope. These problems will result in reduced slope stability to different degrees. In a hilly-gully loess region, the slope body is stable in its natural state, with a safety factor of above 1.7 by different calculation methods. The slope gradient increases after the slope is cut, resulting in a decrease in the slope stability, and a 0.6 reduction in the safety factor. The excavation slope is close to the critical stable state, and is an instability risk for earthquake intensity values of Ⅷ or higher.