Lucky is the property owner who has an abundance of good solid stones on the land. Stones are useful for many landscaping applications, especially for retaining slopes. Even if you don't have stone on your land, local stone is low mGi in embodied energy and delivers a durable result at little environmental cost. (Speaking of cost, stone can often be had for the hauling, especially from farmers' fields and construction sites.)
If your soil is stable and your wall isn't too tall, start with a base course of stone buried in the soil. In unstable situations use a poured concrete foundation (and get help from a civil engineer when designing your wall). Make your base deeper in colder climates to allow for the freeze-thaw cycle that can heave shallow footings and ruin walls. The lowest-impact wall is the dry-laid stone wall, which is fitted together without mortar. Dry-laid walls are leaned back into the slope (this very particular lean is called batter) at a ratio of 1 foot of lean for every 3 to 6 feet of wall height, depending on the soil conditions and type of stone you're using.
Refer to Landscaping For Dummies for further directions on building a great stone wall.
Keep in mind that this project is not only dangerous but challenging, both physically (you will be tired) and in terms of the skills needed to do a truly decent job. But it's a great do-it-yourself project for very fit homeowners (or for those who aspire to be fit). As always, check local building codes, and get professional help if you aren't sure what to do.
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How would you like to save a ton of money and increase the value of your home by as much as thirty percent! If your homes landscape is designed properly it will be a source of enjoyment for your entire family, it will enhance your community and add to the resale value of your property. Landscape design involves much more than placing trees, shrubs and other plants on the property. It is an art which deals with conscious arrangement or organization of outdoor space for human satisfaction and enjoyment.