Call your local town hall office and request a building permit. Many areas will not allow a pool intended for above-ground use to be installed below grade, so check the local laws before installing your pool.
Excavate the ground where the pool will stand by at least 18 inches around the perimeter of the pool walls, according to Dough Boy Swimming Pools. Only excavate space where a slope rises above the level of the ground where the majority of the pool's weight will rest. Leave as much ground undisturbed as possible.
Level the ground where the pool will sit and spread a layer of sand according to the manufacturer's instructions. Assemble the pool and fill the liner, maintaining the 18-inch space between the pool walls and any soil above grade.
Fill the pool with water and let it rest for two weeks before you begin adding backfill dirt, recommends the Above Ground Pool Professionals company. Check the walls for leaks and make sure there are no wrinkles or bulges in the pool liner.
Install a piece of 6-inch black drainage pipe around the wall of the pool for the entire length where the slope was cut away. Lay the pipe so that its ends run downhill, which may require extending the length around the pool beyond where you plan to backfill. Place the drainage pipe immediately after filling the pool to move water from leaks or rainfall away from the cut side of the slope.
Paint the exterior of the pool walls with roofing tar or another waterproof coating if they are susceptible to damage from moisture, according to Backyard City Pools. Allow this coating to dry fully.
Fill in the gap between the pool walls and the top of the slope with contractor grade backfill dirt. Do not use gravel or sand, to avoid damaging the pool walls. Add dirt to reach the level of the top of the slope and give the backfill a few days to settle before topping it off.