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Retaining walls serve to retain the lateral pressure of soil. The basement wall is thus one form of retaining wall. However, the term is most often used to refer to a cantilever retaining wall, which is a freestanding structure without lateral support at its top.

Typically retaining walls are cantilevered from a footing extending up beyond the grade on one side and retaining a higher level grade on the opposite side. The walls must resist the lateral pressures generated by loose soils or, in some cases, water pressures.

The most important consideration in proper design and installation of retaining walls is to recognize and counteract the fact that the retained material is attempting to move forward and downslope due to gravity. This creates lateral earth pressure behind the wall which depends on the angle of internal friction (phi) and the cohesive strength (c) of the retained material, as well as the direction and magnitude of movement the retaining structure undergoes.

Lateral earth pressures are typically smallest at the top of the wall and increase toward the bottom. Earth pressures will push the wall forward or overturn it if not properly addressed. Also, any groundwater behind the wall that is not dissipated by a drainage system causes an additional horizontal hydrostatic pressure on the wall. It is very important to have proper drainage behind the wall as it is critical to the performance of retaining walls. Drainage materials will reduce or eliminate the hydrostatic pressure and will therefore greatly improve the stability of the material behind the wall, assuming that this is not a retaining wall for water.

As an example, the Building Code requires retaining walls to be designed to ensure stability against overturning, sliding, excessive foundation pressure and water uplift; and that they be designed for a safety factor of 1.5 against lateral sliding and overturning.

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