Abstract: The finite difference program, FLAC^3D, is used to model the rigid retaining wall with EPS (expanded polystyrene) deformable geofoam inclusions, and the lateral earth pressure on the wall is obtained from numerical results. The at-rest state, active state and passive state of the retained soil behind the wall are studied, and the reductions of EPS on the lateral earth pressure with different wall displacements are also analyzed. The results indicate that EPS has little influence on the wall displacement required by the active state. The reduction of EPS on the lateral earth pressure decreases with the increase of the wall displacement in the retained soil between at-rest state and active state, while that increases firstly and then decreases with the increase of wall displacement in the retained soil between at-rest state and passive state.