Shear keys can enhance the slip resistance of cantilever retaining walls (CRWs), but their mechanisms are still not clear. In this paper, a numerical model for a CRW built and instrumented in Minnesota was carried out using a two-dimensional finite element program. The validated numerical model and Strength Reduction Method (SRM) were employed to investigate the effect of lengths and positions of the shear key on the stability of the CRW. The analysis shows that the slip surface passes the bottom of the shear key and is deepened and lengthened when a shear key is provided. The stability of the CRW with a shear key is improved because of better anti-slip capacities. The factor of safety of the CRW gradually increases from 1.038 to 1.268, approximately 22%, as the length of the shear key increases from 0 m to 0.6 m. The factor of safety of the CRW increases and then decreases as the shear key moves from the toe to the heel. The factor of safety is maximized when the shear key is set near the middle of the heel. This is because the rotation of the CRW results in a reduction in the effective length of the shear key at the end of the heel.