To study the formation mechanism, slip characteristics, and sliding distance of the liquefaction-induced slip disaster in the Shibeiyuan area during the 1920 Haiyuan earthquake, drilling exploration, sampling, and trench excavation were conducted in the Shibeiyuan liquefaction and slip area. Shear wave velocity tests, particle analysis, and indoor dynamic triaxial tests were performed on boreholes and samples. The stratum distribution in the liquefied slip zone of Shibeiyuan area, the layer of liquefied soil during the earthquake, and the sand under different seismic intensities were then obtained. The comprehensive analysis results of drilling exploration, particle analysis, and dynamic triaxial test revealed the formation mechanism of liquefaction-induced slip disaster of the loess deposit in Shibeiyuan area during the Haiyuan earthquake. The liquefied sandy loess layer floated the first paleosol layer and the upper "dusting" unsaturated loess layer to move along the gentle slope under the combined action of its own weight stress and seismic force. The slip distance formula of the liquefied slip deposit was used to estimate the slip distance (i.e., 223.35 m), which is consistent with the actual situation. The results of this research provide a reference for the prevention of liquefaction and slip disasters in the loess deposit.