The inter-slice action of transmitting coefficient method is classified according to its properties and the relationship among the inter-slice action and active earth pressure and passive earth pressure. This paper reveals that the three types of calculation results discord with the real stress state, which is more dangerous. The reason for the problem is analyzed. The limit value of the inter-slice stress is solved with the Mohr-Coulomb yield criterion. The result shows that the rear slice can occur active destruction when the inter-slice action is less than the active earth pressure. So the inter-slice action should take active earth pressure. The anterior slice can occur passive destruction when the inter-slice action is more than the passive earth pressure. So the inter-slice action should take passive earth pressure. The results are applied to engineering cases.