Abstract: The tests on the bearing behavior of diaphragm wall foundation are conducted to study the vertical ultimate bearing capacity of diaphragm wall and distribution characteristics of negative skin friction after water immersion in collapsible loess foundation. The artificial collapsible loess is prepared by using quartz powder, sand, bentonite, gypsum and industrial salt, and its physical and mechanical properties are analyzed. The tests on the bearing capacity of diaphragm wall foundation are carried out with the artificially prepared collapsible loess as the model filling soil. The results show that the physical and mechanical parameters of artificial loess have a high coherence with those of natural loess, which can be applied to the model tests on the interaction between collapsible loess and structure as similar materials. The total load sharing ratio of side frictional resistance for outer wall and inner wall is 67% as the vertical bearing capacity of the diaphragm wall reaches its limit, which comes to the conclusion that the diaphragm wall is a kind of end-bearing friction foundation. After foundation soaking, the depth ratio of neutral points ranges from 0.64 to 0.73, which is in good agreement with the test results of soaking tests on pile foundation. The core soil is not influenced by water because the diaphragm wall foundation has good integrity and anti-permeability, which exerts side friction of inner wall and reaction force of bearing-stage soil and reduces the foundation settlement of diaphragm wall effectively.