The Huashan landfill in Deqing, Huzhou was investigated which had a 5-year landfill life and was in the condition of water landfill, in order to study the physical and mechanical properties of excavated soil and propose landfill methods to increase the capacity utilization rate of pit landfill and reduce the post-construction settlement. In-situ test and laboratory test indicate that the excavated soil has complex composition, low permeability, high compressibility, and the shear strength of it decreases with the increase of water mass fraction. And the compaction degree of the pit landfill, the bearing capacity of the foundation and the degree of consolidation are low. The LANDFILL program was used to analyse the settlement and the capacity of the pit landfill, and results show that the capacity utilization rate of the pit landfill is low, the post-construction settlement is large and it is not suitable to be directly used for agricultural land or construction land under the condition of water landfill. The capacity of the pit landfill can be greatly increased and the post-construction settlement can be effectively reduced by backfilling excavated soil under the condition of no water filling or lowering ground water. Results provided optimization direction, theoretical basis and data reference for the safety and capacity design of landfill, the foundation treatment and the underground building construction in excavated soil landfill areas.