Landscaping a sloped and rocky yard can be challenging and the best way to handle a garden of this nature is to work with the landscape, rather than against it. You'll need to plant the area, as this will protect against soil erosion. Laying sod may not be a good idea, as mowing on slopes can be problematic, and sloped lawns could prove a little unsafe.
Make a feature of your challenging yard by creating a rockery or dry rock garden. Combine flowing streams of water and waterfall features, cascading down to garden ponds, in your rock garden for added interest. You already have the basic requirements in place for your rockery, as your sloping yard will have the natural drainage mechanism that rockery plants need to thrive. Import additional rocks and gravels for an authentic hillside appearance and choose alpine plants, succulents and shrubs that are best suited to rock gardens in your U.S. Department of Agriculture plant hardiness zone.
If your yard has a very steep slope, you may want to consider terraces. Creating terraces will help prevent hillside erosion and ensure better water retention. Create attractive terraces using natural landscaping materials, such as wood or stone. You could even move the rocks to create natural stone wall terracing. Your terraces provide natural, flat surfaces for rain water to soak into and prevent problems with runoff that can occur. A series of terraces gives you the opportunity to create different minigardens within the landscape.
Plantings and Stripcropping
Where hard landscaping works are impossible, consider planting a range of suitable ground cover plants on the slope, as these plants protect against soil erosion. Alternatively, stripcropping could be a solution. Stripcropping involves planting rows of perennials interspersed between strips of grass. Perennials are valuable plants that reduce soil erosion, while the strips of grass act as filters and will catch most of the soil that runs off from the garden beds. The strips of grass should be wide enough to mow.
Prevent rainwater from running off the slope and into municipal storm drains by building a rain garden at the foot of the slope. Rain gardens will catch the remnants of water draining from your hillside and can be set with plants that tolerate varying degrees of wetness.