The hyperbolic p-y curve method is commonly used to design laterally loaded piles, in which the initial stiffness is one of the two key parameters that need to be determined. In this paper, the effect of an undrained clay slope on the initial stiffness of p-y curves of laterally loaded piles was explored, and nonlinear models of the reduction factor () were proposed. A series of finite-element analyses was performed for different pile–slope geometric relationships according to whether the slope geometry had influence on pile–soil interaction, in which the geometrical parameters were varied. Based on simulation results, a semi-empirical method was mainly used to derive nonlinear formulations for the undrained clay slope effect on the initial stiffness of hyperbolic p-y curves. The wedge failure theory was also used to analyze the effect of the dimensionless slope height on the initial stiffness. Comparing with other researchers’ reduction factor models, the results of the present model are in the reasonable range and can predict more cases. Test cases were used to validate the proposed model, and the results show that theoretical results are in better agreement with test results using the present model.