Research on the dynamic response characteristics and deformation and instability mechanism of loess slopes under earthquake action has important theoretical and practical significance. However, relatively few studies on this topic have been conducted from the perspective of dynamic response spectrum characteristics. The peak ground acceleration data of a loess slope obtained from large-scale shaking table model tests were used in this paper. First, the dynamic instability mechanism of the loess slope was discussed by analyzing its variation law, especially from the perspective of its frequency spectrum characteristics. Then, the analysis of the absolute acceleration response spectrum was performed on the acceleration time histories of measuring points at different elevations of the slope and the points at the vertical and horizontal directions inside the slope. Finally, the dynamic instability mechanism of the loess slope was proposed from the perspective of frequency spectrum changes. Results show that the response process of loess slope under dynamic seismic action can be divided into three stages: elastic stage, plastic stage, and failure stage. When the loess slope enters the failure stage, it is accompanied by an increase in the peak value of the response spectrum or the change of the dominant period. In the elastic phase, the increase in the peak acceleration of the response spectrum is consistent with that of the input ground motion amplitude; in the plastic stage, the increase in the peak acceleration of the response spectrum is smaller than that of the input ground motion amplitude. This study suggests that the highlight of the first peak of the response spectrum can be used as one of the bases for judging the damage degree of the slope.