Inverse grading structures are commonly found in landslide accumulations of high-speed and long-runout landslides. However, there is limited research on the internal erosion of inverse grading deposits. This study developed a program called discontinuous deformation analysis (DDA) and Darcy’s law coupling program (DDCP) using C language to investigate the failure mechanism associated with internal erosion in inverse grading sand. The results indicate that as the hydraulic gradient increases, the internal erosion phenomenon becomes more pronounced. The failure of the inverse grading sand due to internal erosion can be attributed to three processes: loss of fine particles in the lower layer, accumulation of the particles from the upper layer in the lower layer, and flow of fine particles from the upper layer through the lower layer and exit from the bottom. During the internal erosion process, both the hydraulic conductivity and porosity initially decrease and then increase. Similarly, the average velocity of fine particles exceeds that of coarse particles in each layer. The stability of the inverse grading sand during the internal erosion increases with a higher content of fine particles in the lower layer. These findings are significant in understanding the mechanism of internal erosion within inverse grading deposits.