The soil arching effect is an important premise for non-continuity structures (e.g., stabilizing piles) to produce continuous retaining and masking effects; pile spacing is closely related to this concept. A scientific and reasonable method to determine the pile spacing and earth pressure on sheet piles is necessary to design safe and economically feasible stabilizing piles. At present, theoretical analyses of reasonable pile spacing rarely consider the influence of lateral earth pressure. This study proposes a new method to determine a reasonable pile spacing and earth pressure on sheet piles conforming to engineering practices. The said method considers the influence of lateral earth pressure. First, a mechanical analysis model of soil arching was established. In this model, the most unfavorable sections at the arch foot and arch top were used as a control condition, and the problem of soil arching of stabilizing piles was summarized as a zero-value problem to solve the nonlinear equations. Extrema were searched using MATLAB, through which a reasonable pile spacing and soil arching equation were determined. Second, the earth pressure on the sheet pile was calculated from the soil arching equation. Finally, the proposed method was proven reasonable by combining engineering cases. The results show that the pile spacing significantly varies under different failure control conditions of the soil arching effect. In the proposed method, the calculated pile spacing is 8 m, which is between those obtained from two existing methods. This pile spacing is relatively reasonable. The earth pressure on the sheet pile is calculated by the integral method through a reasonable arch axis. The calculated soil range in the proposed method is closer to practice compared with those calculated via classical earth pressure theory and the original simplified granary method. Moreover, the earth pressure of the proposed method is appropriate. The proposed method is applicable to the design of sheet piles. Considering appropriate safety reserves, the proposed method can not only calculate the minimum pile spacing but also judge the reasonability of the designed pile spacing.