Based on pseudo-static theory, improved horizontal slice method is derived for retaining walls in translational mode to investigate the influence of principle stress deflection on the earth pressure. The method considers the principle stress deflection of soil behind walls and the horizontal shear force between slices. The basic equations are established according to stress state and static equilibrium condition, and solved by using iterative search algorithm to calculate the slip surface shape, seismic active earth pressure distribution, earth pressure coefficient and resultant force point, then parametric discussion is taken. Numerical results indicate that the slip surface shape for cohesionless soil is approximately linear, so it’s quite reasonable to use the hypothesis of planar slip surface in simplified calculation. In addition, soil friction angle and horizontal seismic action significantly impact earth pressure distribution, instead, the influence of wall friction angle and vertical seismic action are relatively smaller. Compared with the traditional pseudo-static method, earth pressure distributions by two different methods basically agree with each other, but the curve from the improved horizontal slice method trends towards nonlinear increase.