Aiming at the problems of ground settlement induced by the underground pipeline damage in water-rich sand layer, a set of visualization experimental device was designed. For these cases of 11 kinds of sand samples with particle size of soil d₉₀=1.45~8.45mm and 5 kinds of full pipe flow velocity, the behavior of ground settlement induced by seepage erosion was studied. Research showed that:（1）There are three modes of seepage erosion induced by pipeline damage: only water inrush without settlement, soil arching formation with settlement, and sand crushing with settlement;（2）The particle size of soil , damaged mouth size and thick-span ratio are the main factors determining the seepage erosion mode of soil;（3）When the soil arching or sand crushing is formed in the soil above the damaged mouth of pipeline, the relationship between the particle size of soil d₉₀ and the thick-span ratio r is that: when 8.0≥r≥4.2, the d₉₀ decreases parabolically with the increase of r; when 12.5≥r≥8.0, d₉₀ remains unchanged;（4）When the soil arching or sand crushing is formed in the soil above the damaged mouth of pipeline, the initial settlement radius and settlement depth with the flow velocity of 0 are determined by the ratio (D/d₅₀) of the damaged mouth diameter D and the average particle size of soil d₅₀ ; the settlement radius and depth increase linearly with the increase of full pipe flow velocity; when the soil arching is formed, the expansion velocity （V_L、V_H） of settlement radius and settlement depth with the increase of flow velocity is logarithmic to D/d₅₀; When the sand crushing is formed, the expansion velocity V_L of settlement radius with the increase of flow velocity is that, when 23.0≥D/d₅₀≥6.0, it increases linearly with the increase of D/d₅₀; when 42.0≥D/d₅₀≥23.0, it decreases logarithmically with the increase of D/d₅₀.