Parameter-M is the proportion factor of horizontal soil reaction when the soil is compressed horizontally, and the corresponding method of pit retaining structure analysis is named as M-method. M-method is widely used to determine the working state of pit retaining structures in China, however, parameter-M varies significantly when deduced by different approaches. An analysis unit is chosen in the subway station pit in Zhengzhou, center of China, on the bank of Yellow River. The retaining structure consists of reinforced concrete piles, internal bracing struts made of steel pipes. The horizontal displacements of retaining piles and the axial forces in pipe bracing struts are monitored in-situ. Then, calculation assumption is taken as that during the elastic deformation stage, parameter-M for each soil keeps constant. Then a series of equilibrium equations of forces acting on retaining structure are set up to determine the values of M for each soil corresponding to deferent stages of excavation. When the identified values of M are applied in the later projects, it shows the validity and accuracy of the method. Precise values of M are applied in the similar geological sites to optimize the retaining structure design.