Abstract Many cases of waterfront retaining wall failure, as a result of earthquakes, are caused by deterioration of soil and not by the insufficient dimensioning of the retaining structure. Softening of soil or liquefaction, when there are saturated sand deposits, taking place in wide zones causes global failures which result in significant damage. The phreatic surface position has a great effect on the structure response to dynamic action. Comparison of computer models and field and laboratory measurements can give greater insight into predicting real soil-structure response to dynamic loading and to validating numerical models. A finite element analysis representing a system of soil, water, retaining structure and interfaces between the different materials is described. The fluid elements have elastic behaviour with zero shear modulus and the real bulk modulus. A elasto-plastic stress-strain law is used in soil discretization with different treatment for volumetric and shear straining, i.e. the bulk and shear moduli are independent. Energy absorbing boundaries are used to prevent undesirable reflections of stress waves in order to simulate very large or infinite domains. Excess pore pressures are generated during the seismic loading and at every step a check is made on the values of effective stresses for eventual liquefaction that may occur.