The water-retaining capacity, percolation and evaporation of stony soil in Liupan Mountains, China, were measured in order to understand the effect of rock fragments on soil hydrological processes. The results indicated that the effective water-retaining capacity of soil is positively related with the volumetric content of rock fragments, but there is no relation between saturated water-retaining capacity and rock fragment content. For the soil layers within 0–40 cm, the steady infiltration rate increases with increasing volumetric content of rock fragments until it reaches the range of 15%–20%, and then it decreases when the rock fragment content further increases. For the soil layers below 40 cm, the steady infiltration rate always increases with increasing rock fragment content. The soil evaporation rate decreases with increasing volumetric content of rock fragments when it varies in the range of 0–20%, while the soil evaporation rate keeps basically stable when the rock fragment content is higher than 20%. The soil evaporation rate shows a rising tendency with increasing size of rock fragments.