Sheet pile walls, widely used in landslide control projects, have demonstrated excellent seismic performance during the great Wenchuan earthquake, as indicated by an investigation of retaining walls following earthquake damage. To further understand the mechanism of seismic damage based on the Hilbert-Huang transform method and marginal spectrum identification theory, a large-scale shaking table test of bedrock and overburden layer slope reinforced by sheet pile wall was carried out, and the mechanism of seismic damage was analysed. The results show that the change in marginal spectrum amplitude and characteristic frequency can clearly indicate the degree of seismic damage to the slope soil. First, the dynamic response of the slope soil near sheet pile wall is smaller than the response observed in soil farther from the wall, and the degree of seismic damage near the wall is relatively weaker than that farther away from the wall. Second, the energy of the seismic wave cannot be completely transferred behind the wall, and the strip cracks of soil behind the wall can be determined. Finally, the slope soil slides along a slip surface so that the front edge of the slope is squeezed due to the vertical tensile cracks at the rear edge. In addition, the results confirm the feasibility of the Hilbert-Huang transform method for studying the mechanism of the seismic damage to the structure-soil coupling system.