Abstract: The foundation of the underground diaphragm wall is a kind of frictional foundation with relatively shallow buried depth, which has a wide application prospects in the foundation with huge thick loess layer. In order to study the vertical compressive bearing characteristics of the underground closed diaphragm wall in the loess foundation with huge thick loess layer, the quartz powder, sand, bentonite and gypsum are chosen to prepare as the similar materials of loess, which simulate the natural undisturbed loess. And this model wall is made of the organic glass. Indoor scale model testing is carried out to analyze the load transfer mechanism and the vertical compression bearing capacity of the underground diaphragm wall foundation. The testing and analysis results show that the load settlement relationship curves of the underground diaphragm wall under the vertical loads belong to the type of steep fall, and there exist some significant failure points. The vertical bearing capacity of the underground diaphragm wall is composed of inner shaft resistance, outer shaft resistance, toe resistance and soil resistance under the cap, and the four kinds of the resistance are asynchronous. When the vertical bearing capacity of the underground diaphragm wall reaches its limit, the load sharing ratio of the total shaft resistance is 62%, and the underground diaphragm wall belongs to the end bearing friction foundation. The existence of the core soil can effectively reduce the settlement of the underground diaphragm wall foundation. The testing results can provide a technical reference for the type selection and design of the underground diaphragm wall foundation at large thickness loess sites.