Abstract: The existing slope deformation sensors are easily influenced by rainwater, mud-rock flows, rolling stones and other environmental factors, and the arrangement of equipment is not convenient for the internal deformation monitoring. Based on the magnetic detection, the smart rock is fabricated with magnetic label, and a slope monitoring system is established with the combination of smart rock and magnetometer. The genetic algorithm is improved by the Levenberg-Marquardt algorithm to realize the localization of smart rock using magnetic gradient tensors. The separation of earth's magnetic field and the smart rock’s magnetic strength is avoided through localization based on the magnetic gradient tensors, and the convergence and the accuracy of optimization are solved during the magnetic inversion. In the example, the slope deformation monitoring by magnetic inversion can reach the accuracy of 0.01 m through the magnetic gradient tensors, but the accuracy can be adjusted by increasing the moment of magnetic label and by changing the location of magnetic gradiometer in the practical engineering monitoring.