Abstract: Loess Plateau used to be the area with the most serious erosion in China even world. Erosion area in Loess Plateau was up to 454 000 km2, accounting for 70% of the total area in the 1990s. Extremely intensive erosion area with erosion modulus more than 8 000 t/(km2·a) was up to 85 000 km2, accounting for 64% of the similar areas in China. Severe erosion area with erosion modulus more than 15 000 t/(km2·a) was up to 37 000 km2, accounting for 89% of the similar areas in China. Since 1998, Grain-for-Green Project has been implemented in the Loess Plateau. With the advancement of Grain-for-Green Project, forested land and grassland increase, and farmland decreases. Besides, as the population grows, Grain-for-Green Project has negative effects on grain production in some regions, and the population-grain conflict is intensified. In Yan’an, Shaanxi Province, farmland decreased by 74 000 hm2, grain production decreased by 156 000 t, and per capita grain production decreased by 132 kg with an increase of the residential population of 260 000 compared with those prior to the implementation of the project. With the further intensification of the conflict between population and grain, the demand for new agricultural production space is increasing. After decades of implementing Grain-for-Green, the vegetation cover rate increases and the erosion decreases greatly, which creates preconditions for gully land consolidation. Local initiatives of gully land consolidation since 2012 have achieved initial success. Gully land consolidation creates new space for agricultural and rural development. But how to design and plan the gully land consolidation engineering at a large scale and thus make it be approved by the central government needs systematic thinking and research. Taking Yan’an City, Shaanxi Province as a case study, this paper introduces the basic concepts of the gully land consolidation and its enhanced design in the Loess Plateau. Taking “farmland increasement, ecological protection, people’s livelihood guarantee” as the theme, and “landscape coordination, structure stability, sustainable land use, effective function” as the concepts, the project highlights the land use zoning, which can be described in detail as “returning farmland to forest on the mountain, consolidating gully to farmland in the valley”, and put the emphasis on protecting ecological environment and benefiting local residents’ livelihood. In the step of planning and design, the zoning, classification standards and key techniques of gully land consolidation are identified, and 4 project construction types are proposed, which are restoration-type consolidation, facilities-type consolidation, exploitation- type consolidation, and comprehensive management-type consolidation. Furthermore, the enhanced consolidation technology system is also created, which involves “mainstream-tributary-capillary flow” tiered prevention and control technology, “canal-embankment-dam” matching system, and “tree-shrub-grass” scientific collocation. Since the implementation of the major project of more than 2 years, it has generated economic, social and ecological benefits to some extent. To further exert the project’s comprehensive benefits, the next 4 major projects need be adopted, namely new rural communities and residential resettlement project, urban and rural equalization of services and service facilities engineering, modern agriculture industrialization base construction, and rural land capitalization and land system innovation.