The saturated and unsaturated soil were widely studied by many researchers nowadays. With the development of calculation mechanics and computer, the discrete element method (DEM), as a powerful technique, has been implemented in saturated soil mechanics. This paper review the development of DEM and its application in saturated soil research. Meanwhile, it also prospect the application of DEM in unsaturated soil research. Besides, it also raised some problems that might be met in the real practice and it also tried to put forward some reasonable methods to solve these problems. In the end, this paper put forward a new DEM contact model based on the surface energy to analysis unsaturated soil.