The vertical structural stability of floating drilled shaft during sinking is an important practical issue on the safety of boring technique in the deep and thick alluvium. In fact, the vertical structural stability of shaft lining is a matter of overturn buckling. Theoretical analysis shows that the height of balance water (HBW) is the most important factor for the vertical structural stability of shaft lining. If the HBW is controlled in a reasonable range, the shaft lining will not buckle during construction. The shaft lining is regarded as a slender bar with closed bottom and floating in the mud while sinking. According to the mechanical analysis on the shaft lining from floating and sinking to the process of contacting the well bottom, a reasonable range of the HBW is deduced. Finally, with practical instances, the author in this article introduces the calculation principle in vertical structural stability of shaft lining while sinking and floating using finite element method (FEM). The simulation results show that in the reasonable range of HBW, the stability of shaft lining increases as the height of balance water goes up.