In the Loess Plateau region, loess, as a widely distributed building material, is often used as a filling material for dams. When the water level reaches a certain height, the body of a dam is prone to shear failure due to the penetration of water. The change in the shear performance of local loess filler can affect the overall strength of loess dams. Therefore, the filler of a loess dam is selected to study the shear performance. The progressive failure process of a loess dam is simulated. The shear failure characteristics of loess filler under the influence of water content, confining pressure, and dry density were explored. The characteristics of the shear failure of a loess dam were analyzed. The remolded loess is prone to shear expansion failure under low confining pressure, low water content, and high dry density, and is prone to shear shrinkage failure under high confining pressure, high water content, and low dry density. When the water content is constant, the cohesion increases with the increase in dry density. When the dry density is constant, the internal friction angle generally increases with the increase in water content. However, when the dry density is high, the permeability of the remolded loess is weakened, resulting in uneven water distribution under a low water content, which affects the test results. The failure process of the loess dam is a progressive shear failure, which is affected by the water level and water pressure, and is destroyed under the action of pore water pressure and water body lateral pressure.