A gigantic project named Gully Land Consolidation (GLC) was launched in the hill-gully region of the Chinese Loess Plateau in 2011 to cope with land degradation and create new farmlands for cultivation. However, as a particular kind of remolded loess, the newly created and backfilled farmland may bring new engineering and environmental problems because the soil structure was disturbed and destroyed. In this study, current situations and characteristics of GLC are introduced. Test results show that physical-mechanical properties and microstructural characteristics of backfilled loess of one-year and five-year farmland are significantly affected by the Gully Land Consolidation project. Compared to natural loess, the moisture content, density, and internal friction angle of backfilled loess increase. On the contrary, the porosity, plasticity index, particle size index, and cohesion index decrease. Through SEM tests, it is observed that the particles of backfilled loess are rounded, with large pores filled with crushed fine particles, which results in skeleton strength weakness among particles and pores. The pore size distribution (PSD) of the four types of loess (Q3 loess, Q2 loess, one-year farmland, and five-year farmland) was measured using mercury intrusion porosimetry (MIP) tests, showing that the pore size of Q3 loess is mainly mesopores 4000–20,000 nm in size, accounting for 67.5%. The Q2, five-year, and one-year farmland loess have mainly small pores 100–4000 nm in size, accounting for 52.5%, 51.7%, and 71.7%, respectively. The microscopic analysis shows that backfill action degrades the macropores and mesopores into small pores and micropores, leading to weak connection strength among soil particles, which further affects the physical-mechanical properties of loess. The disturbance of backfilled loess leads to an obvious decrease in cohesion and a slight increase in internal friction compared to natural loess. The farming effect becomes prominent with increased backfill time, while the loess soil moisture content increases gradually. Both the cohesion and internal friction of the backfilled loess soil decrease to different degrees. This study is helpful to investigate sustainable land use in the Chinese Loess Plateau and similar areas.