The large deformation mechanical properties of slip zone soil play an important role in the stability evolution of landslide. The traditional landslide stability evaluation method can only be used to calculate a single stability factor, which cannot dynamically evaluate the landslide stability as it evolves. The large deformation mechanical properties of slip zone soil from Outang landslide in the Three Gorges Reservoir area are investigated by the indoor repeated direct shear test. Based on the damage theory, the shear damage behavior of slip zone soil with large shear displacement is analyzed, and a mechanical model describing the relationship between shear stress and shear displacement in accordance with the mechanical mechanism of landslide is established. Then, the stability of Outang landslide is dynamically evaluated by skillfully combining the mechanical model and the residual thrust method. The results show that the slip zone soil has obvious softening behavior and constant residual strength under the condition of large deformation. The model with clear physical meaning can reflect the large displacement shear mechanical properties of slip zone soil, which is consistent with the test results. The stability factor of Outang landslide gradually decreases and tends to be constant as landslide moves. The mechanical mechanism of the landslide stability evolving with deformation is the strain softening behavior of the slip zone soil, and the mechanical mechanism of the landslide stability evolving with water level is the reduction of effective stress in anti-sliding section under the influence of reservoir water. It is suggested that active measures should be taken in time in the prevention and control of landslide, and the construction of drainage engineering should be paid attention to for large-scale bank landslides.