Internal erosion is one of the most common failure modes of embankment dams or foundations, and the simplest and most effective preventive measure is to build a cutoff wall. The soil at the bottom of the cutoff wall is usually under complex stress states. The deeper the cutoff wall, the higher is the stress. In this study, the effects of stress conditions on the evolution of internal erosion were investigated in sandy gravel foundations containing a suspended cutoff wall using a newly developed stress-controlled erosion apparatus. Three series of erosion tests were conducted on gap-graded soil under different confining stresses, different deviatoric stresses, and different confining and deviatoric stresses. The results of these tests are as follows: (1) The discharge and permeability decrease with an increase in the confining stress, but the critical hydraulic gradient increases. (2) In the second series of erosion tests, the specimen is compressed under low deviatoric stress; the specimen undergoes shear expansion under high deviatoric stress. (3) In the third series of erosion tests, the confining and deviatoric stresses synchronously change, and therefore, their combined effect on the evolution of internal erosion is complicated. Under low stress, the soil is compressed in the early stage of the experiment, and its structure may change during internal erosion. When the stress level is high, the specimen also undergoes shear expansion, and the degree of expansion is controlled by both confining and deviatoric stresses.