The frequent dry-wet cycles in the Loess Plateau can lead to the deterioration of fiber-reinforced loess (FR loess), which in turn can cause collapse when exposed to rainfall erosion or immersion. In recent years, geopolymers have received considerable attention due to their advantages, such as solid waste disposal and low carbon dioxide emissions. In this paper, the effects of geopolymer, consisting of steel slag (SS), ground granulated blast furnace slag (GGBS), desulfurization gypsum (DG), and sodium silicate, on the durability and water stability of FR loess were studied by conducting dry-wet cycle tests, immersion tests, and unconfined compression tests. The results show that the unconfined compressive strength (UCS) of fiber-reinforced and geopolymer-stabilized loess (FRG loess) decreases exponentially with the increase of dry-wet cycles while increasing approximately linearly with geopolymer dosage. The water stability coefficient of FRG loess shows a logarithmic increase with dry-wet cycles and increases linearly with geopolymer dosage, and the higher the dosage, the greater the water stability. The stabilization and dry-wet deterioration mechanisms of FRG loess were investigated by XRD and SEM-EDS tests. It reveals that the main mineral phases of FRG loess are calcium silicate hydrate, calcium aluminate hydrate, calcium aluminate silicate hydrate gel, and ettringite crystal. The microstructure of FRG loess is quite dense, but after the dry-wet cycles, it appears some cracking and loosening. The pores and microcracks of the low-dosage samples develop distinctly under dry-wet cycles, whereas the microstructure of high-dosage samples shows significant overall stability. The study on the durability and water stability of FRG loess under dry-wet cycles suggests that the optimal geopolymer dosage should be 15%.