To ensure the safety of underground mining activities and effectively protect the surface production facilities and houses of the nearby residents, the ground movement caused by the sublevel caving method needs to be studied. In this work, the failure behaviors of the surface and drift of the surrounding rock were investigated based on the results of in situ failure investigations, monitoring data, and engineering geological conditions. The results were then combined with theoretical analysis to reveal the mechanism responsible for the movement of the hanging wall. Driven by the in situ horizontal ground stress, horizontal displacement plays an imperative role in both the movement of the ground surface and underground drifts. Accelerated movement is found to occur in the ground surface which coincides with the occurrence of drift failure. Failure occurs in the deep rock masses and then gradually propagates to the surface. The steeply dipping discontinuities are the main reason for the unique ground movement mechanism in the hanging wall. As steeply dipping joints cut through the rock mass, the rock surrounding the hanging wall can be modeled as cantilever beams subjected to in situ horizontal ground stress and lateral stress due to caved rock. This model can be used to obtain a modified formula for toppling failure. Also, a mechanism of fault slipping was proposed, and the condition required for fault slipping was obtained. Based on the failure mechanism of steeply dipping discontinuities, the ground movement mechanism was proposed considering the horizontal in situ ground stress and caved rock mass: slippage of fault F3, slippage of fault F4, and toppling of rock columns. Based on the unique ground movement mechanism, the goaf surrounding rock mass could be divided into six zones: a caved zone, a failure zone, a toppling-slipping zone, a toppling-deformation zone, a fault-slipping zone, and a movement-deformation zone.