Abstract: The clayey diatomite in Tengchong is a special kind of rock soil mass, characterized by rich swelling clay minerals, high porosity, low density, high water absorption capacity and strong structural properties. Along with the fast pace of engineering construction, there exist a series of geological hazards including landslides in clayey diatomite area. Based on analyzing the engineering properties of clayey diatomite, the authors took the clayey diatomite as the research object to study its distribution and formation mechanism. The results indicate that clayey diatomite landslides affected by such factors as road dissection, mining and rain are mainly of medium and small scale. The clayey diatomite slope landslides usually occur in the middle and rear part of the slope. Because of its swelling and strong structural properties, the clayey diatomite slope stability is relatively poor. With the landslides along the new Teng-Lu Highway as an example, the authors studied its formation mechanism. The result shows that the soil on the surface of the slope can be divided into several layers by intensity, and the swelling increases while the mechanical intensity is reduced. Some suggestions are also put forward based on numerical simulation analysis and optimal design performed on the slope of the Fengjia Mountain.