Abstract: It has been a pinch point to control the trench stability and panel joint permeability in the conventional underground diaphragm concrete wall. It is prone to high construction cost because of environmental pollution due to bentonite slurry and waste of water consumption plus debris disposal treatment. A new technology, i.e. dry diaphragm trenching with self-guided double-rectangular-case, is developed in this paper in order to avoid these problems. Through this technology, two pieces of rectangular steel casing are driven in sequence and guided each other and trench is made by squeezing the soft soil, if wall thickness ranges from 300 mm to 500 mm; or by dragging soil out of the casing, if wall thickness ranges from 600 mm to 1000 mm as in the normal condition. Panel alignment and straightness are assured without any joints due to dry concrete pouring instead of influenced by bentonite slurry. Compared to regular diaphragm wall, it is a new environment-friendly, less emission and energy conserved technology by eliminating the slurry pollution with low cost. Engineering practice shows that the quality of panel connection is reliable; in the meanwhile, the permeation-proof performance due to jointless interlocking is superior with high efficiency in wall-erecting. This technology can be applied not only to the retaining system of foundation pit in soft strata but also to the infiltration prevention and reinforcement of reservoir in the similar conditions.