This study is intended to simulate and better understand mean and extreme precipitation over the Loess Plateau (LP) in China using the Weather Research and Forecasting (WRF) model. We performed a long-term (1980–2011) simulation with the WRF model at a 10 km horizontal resolution, forced by the ERA-Interim reanalysis. A series of sensitivity experiments were conducted to investigate the influence of resolution and physical parameterization schemes on the simulation ability of the WRF model over the LP. The region has a dominant semi-arid climate and is adversely affected by extreme precipitation. Results show that the WRF model produced better simulations at a 10 km resolution for the LP with complex terrain than it did at coarser resolutions. WRF simulations for precipitation over the LP were most sensitive to cumulus schemes, moderately sensitive to planetary boundary layer schemes, and less sensitive to microphysics schemes. The WRF model not only adequately captured the spatial distribution of precipitation in the LP but also reproduced its magnitude and variability at different time scales. Moreover, the WRF model captured 73% of the observed extreme precipitation events with an intensity of more than 12 mm day−1, which cause substantial soil erosion in the LP. Although it was unable to capture 27% of the observed events, the WRF model reasonably reproduced ERA-Interim extreme precipitation and its dynamic processes. These analyses strongly suggest that the biased extreme precipitation generated with the WRF model most likely resulted from inaccurate ERA-Interim forcing data. This study provides a better understanding of extreme precipitation simulations as well as insight into predictions of soil erosion in the LP.