Distribution of earth pressure behind retaining wall is closely related with displacement of retaining wall and mode of rotation. For rigid retaining wall rotating outward around the base, based on analysis of forming mechanism of earth pressure and precious studies, a formulation of the relation between mobilized internal friction angle of soil behind the wall and displacement is developed, which reflects the process of progressive mobilization of soil internal friction angle as displacement of retaining wall increases. On the basis of it, a modified computational method for active earth pressure considering wall displacement of retaining wall is put forward. Computational results show that earth pressure behind retaining wall decreases gradually from at-rest earth pressure as the displacement increases; and when displacement of retaining wall reaches a critical value, all corresponding earth pressure values behind the wall converge to Coulomb’s active earth pressure values. Earth pressure behind the bottom of retaining wall also converges to Coulomb’s active earth pressure gradually as the movement of retaining wall increases. By comparing with model test results, it is shown that the value of theoretical computation is in good agreement with the measured experimental value.