There are necessities of vertical excavation to reduce construction areas and make new spaces in urban area. In this study, 3 dimensional numerical analysis is conducted to assess the behaviour of the embankment with vertical excavation and a short and large diameter soil nailing reinforcement system. The spacing of soil nails are 1 m, 2 m, and 3 m, though the diameter is fixed as 40 cm. Lateral and vertical displacement at the top of wall, vertical displacement and axial stress are also obtained and analyzed. Consequently, lateral displacement at the top of wall increases sharply and tensile stress of soil nail excesses the allowable limit at the nail spacing of 3 m. Therefore, we concluded that the optimum spacing of a short and large diameter soil nailing system could be around 2m at the aspects of safety and cost efficiency for excavation and reinforcement of embankment.