Abstract: Slope land preparation has a significant effect on soil and water conservation in sloping farmland in hilly and mountainous areas. Soil structure and water holding capacity can be improved to reduce soil erosion for land use efficiency. Existing research focused on the influence of slope land preparation on soil macroscopic features. However, it is still unclear on the specific mechanism of how slope land preparation regulates soil microstructure to determine the soil water holding capacity, especially soil aggregate structure and its related functional groups. From the microscopic point of view of soil, this study aims to explore the effects of different slope land preparation measures on soil aggregate structure, functional groups, and their quantitative relationship with soil water retention capacity. The results showed that different measures of slope land preparation played a significant role in the soil aggregate structure. Compared with the slope farmland (control group), slope land preparation effectively altered the composition and structure of soil aggregates, and then weakened the cementation among soil aggregates. A small and complex aggregate pore structure was formed, especially the mosaic pores. Therefore, slope land preparation significantly improved the spatial uniformity and structural stability of soil aggregate pores. In addition, the gradation composition of soil aggregates was optimized to improve the water permeability and retention of soil. There was a variation in the content of hydrophilic functional groups in the soil after the slope land preparation. Specifically, the soil aggregate porosity was closely related to the relative content of C-OH groups in the hydrophilic functional groups, providing for a more favorable micro-environment to maintain soil moisture. Furthermore, a systematic analysis was conducted to explore the effects of different slope land preparation on soil water retention. The results showed that the soil preparation of the horizontal platform dominated the soil water retention capacity. Specifically, the field soil maximum water holding capacity (27.06 mm), capillary water holding capacity (25.42 mm), and field water holding capacity (22.57 mm) of the horizontal platform were significantly higher than those of the reverse slope platform and slope farmland. The comprehensive index of soil water holding characteristics from large to small was horizontal platform (75.05), reverse slope platform (57.20) and slope farmland (53.49). The slope land preparation also improved soil moisture retention. The fractal dimension of hydrophilic functional groups (especially C-OH groups) and soil aggregate pores were the main factors affecting soil water holding capacity. Compared with the slope farmland, slope land preparation was used to regulate the pore structure of soil aggregates for the water storage capacity of soil, thus effectively improving the soil moisture r retention. Water and soil resources were optimized for slope farmland in hilly and mountainous areas.