How can I use a sloped area in my yard (pic attached)?

Retaining wall and backfill,and increase your yard,or make patio with fire pit.

Good question! Do you currently use that area for anything? Like walking the dog or a path around the pool?

if so, you could put in a retaining wall, and create a level space. This is a brutally hard job, one I’ve done many times.

Options for retaining walls include those manufactured blocks which are not pretty, but looks like you won’t be looking at them, or large boulders, brought in with heavy equipment.

If you don’t use the space, things just got a lot easier!

Start at the bottom of the grassed area and plant perennials suitable for your location and shade levels.

Plants that will get tall go on the lowest level, then work your way up with progressively lower growing plants.

Tell us which situation you’re in, as well as where you’re located, and we can be more specific!

Don't know where you live, but I'm thinking: why do anything? This is a great drainage slope. Grass is growing and trees are shading it. Is there something you want to do? Reconstructing the grade may backfire - you could get flooding somewhere you don't want it. My grandpa use to say, "If it ain't broke, don't fix it."

We built a pond into our area and a deck off one side with stone walkway on the otherside.

This site has some great sloped yard ideas if you are interested in looking at them:

https://www.designrulz.com/design/2015/05/20-sloped-backyard-design-ideas/

You could terrace the slope. A nice patio area by the fence and plantings going down.

https://www.google.com/search?q=terrace+sloped+yard&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjpnvPpisnjAhWB_lQKHe0QCysQ_AUIESgB&biw=1536&bih=740