Loess tunnels are very common in the Loess Plateau, and they pose unique geological threats. Loess tunnels are often difficult to detect and control due to their concealment and sudden appearance. Thus far, research on the genesis and evolution of loess tunnels remains scarce. In this paper, the genesis and evolution mechanism of the loess tunnels in the Loess Plateau is studied in depth, and the location, shape, and size information are obtained via field investigations. The potential correlations between the loess sediment, the basic physical properties (depth, water content, particle size composition, collapsibility coefficient, and self-weight collapsibility coefficient), and the tunnel density are inferred based on the Pearson’s correlation coefficients and tests on the physical and mechanical properties of the loess sediments. In addition, spatial statistical modelling is employed to justify and predict the observed spatial distribution of the loess tunnels assuming Gaussian Markov random fields. The formation of loess tunnels is due to a combination of factors, including the formation thickness, soil properties, joints and fissures, topography, hydrogeology, and climatic conditions. The thickness of the loess, loess sediment properties, and their spatial relationship jointly determine the material basis of the formation of the loess tunnels. The loess tunnels at different depths have different main controlling factors that are hierarchical by depth. The evolution process of loess tunnels can be divided into five stages: the incubation stage, formation stage, development stage, failure stage, and withered stage. The characteristics of each stage are discussed in detail. Our work provides novel insights into subsurface erosion from the aspect of soil tunnels. It improves our understanding of hill slope geomorphological evolution and also provides effective techniques for tunnel erosion control.