In order to study the active earth pressure on retaining walls in response to soil arching effects, considering the effect of wall friction angles on the inclination of sliding planes, theoretical analysis was applied to minor principal stress arches. The horizontal width of soil arch differential elements at different depths was calculated, and the expression for the shape of minor principal stress arches was obtained. According to the arch shape obtained, a differential element method was developed, in which differential elements were divided along the axis of minor principal stress arches. Then, this method was used to compute the active earth pressure on retaining walls, and a theoretical formula was obtained. Comparison of the present results with experimental data and results from other theoretical methods shows that the results from the present theoretical formula agree with those of the model test.