A nonlinear effective stress finite element approach for dynamic analysis of soil structure is described in the paper. Major features of this approach include the use of a third parameter in the two-parameter hyperbolic stress-strain model, a modified expression for unloadingreloading modulus in the MartinFinnSeed pore-water pressure model, and an additional pore-water pressure model based on cyclic shear stress. The additional pore-water pressure model uses the equivalent number of uniform cyclic shear stresses for the assessment of pore-water pressure. Dynamic analyses were then conducted to simulate the seismically induced soil liquefaction and ground deformation of the Upper San Fernando Dam under the 1971 San Fernando Earthquake. The analyses were conducted using the finite element computer program VERSAT. The computed zones of liquefaction and deformation are compared with the measured response and with results obtained by others.Key words: effective stress method, finite element analysis, Upper San Fernando Dam, earthquake deformation, VERSAT.