Water level fluctuations in the reservoir deteriorate soils and rocks on the bank landslides by drying-wetting (D-W) cycles, which results in a significant decrease in mechanical properties. A comprehensive understanding of deterioration mechanism of sliding-zone soils is of great significance for interpreting the deformation behavior of landslides. However, quantitative investigation on the deterioration characteristics of soils considering the structural evolution under D-W cycles is still limited. Here, we carry out a series of laboratory tests to characterize the multi-scale deterioration of sliding-zone soils and reveal the mechanism of shear strength decay under D-W cycles. Firstly, we describe the micropores into five grades by scanning electron microscope and observe a critical change in porosity after the first three cycles. We categorize the mesoscale cracks into five classes using digital photography and observe a stepwise increase in crack area ratio. Secondly, we propose a shear strength decay model based on fractal theory which is verified by the results of consolidated undrained triaxial tests. Cohesion and friction angle of sliding-zone soils are found to show different decay patterns resulting from the staged evolution of structure. Then, structural deterioration processes including cementation destruction, pores expansion, aggregations decomposition, and clusters assembly are considered to occur to decay the shear strength differently. Finally, a three-stage deterioration mechanism associated with four structural deterioration processes is revealed, which helps to better interpret the intrinsic mechanism of shear strength decay. These findings provide the theoretical basis for the further accurate evaluation of reservoir landslides stability under water level fluctuations.