A large-scale immersion experiment was carried out to assess the collapsibility characteristics of loess in Bu Li village located in the Weibei Loess Tableland, and the seepage characteristics and collapsibility evolution of loess were determined. The effects of void ratio, natural moisture content, material composition, and microstructure evolution on the loess collapsibility were characterized by X-ray diffraction, scanning electron microscopy, and water-soluble salt analysis to elucidate the collapsibility mechanisms. The water diffusion morphologies considering various foundation lithologies, initial water contents, and stratum combinations were studied with the numerical simulation method, and an inverted-box-shape barrier measure preventing loess from the water immersion was proposed. The results showed that the maximum consolidation settlement was approximately 380.5 mm for the test site, and the expansion of clay minerals and the dissolution of soluble salts during wetting were the critical reasons for loess collapse. The void ratio and natural moisture content showed a positive and negative correlation with the collapsibility coefficient, respectively, and the concept of collapsibility potential was introduced. The water diffusion morphologies in distinct stratum combinations significantly depended on the permeability capacity of the lower soil layer, and the optimal depths of the vertical barrier were recommended to be set at the maximum inflection point in the diffusion morphology or the main action layer.