As a type of specific saturated loess, saturated soft loess is extremely unfavorable for engineering construction. Based on large amounts of survey data and testing results, this paper summarizes the spatial distribution characteristics and physical and mechanical properties of saturated soft loess in the Xianyang urban area. Furthermore, it analyzes the cause of saturated soft loess from the collapsibility of loess and the historical trend of groundwater level. Results indicate that the saturated soft loess in the Xianyang urban area is mainly distributed in the central and eastern parts of the second terrace, with an average porosity ratio of 0.85 and a compression modulus of 5.07 MPa, which has a large porosity ratio and compressibility and low strength. The main internal factor for the formation of saturated soft loess in Xianyang is the special structure of loess, and the main external environmental factor is the rise in water level caused by large- scale irrigation projects since the 1970s.