Abstract: In order to reveal the deformation characteristics and foundation reinforcement laws due to dynamic compaction replacement (DCR), the finite difference principle-based arbitrary Lagrange Euler (ALE) method is adopted in the DCR simulation. A three-dimensional dynamic FEM model is established based on the ALE method. The process of foundation reinforcement under single tamping and continuous dynamic compaction replacement is discussed respectively. The influences of various parameters on the reinforcement effects of high-energy DCR are then analyzed and applied in a real project. The research results indicate that the ALE simulation method can describe the flow deformation of gravel layer during DCR, and can be used for simulating continuous dynamic compaction. The absorption of ramming energy due to backfilling gravel is notable that the reinforcement effects of foundation soil can be weakened as consequence. Therefore, the "less filling-more ramming" named DCR strategy is proved to be more reasonable. The rammer diameter, as much as 2.5 m, is beneficial to the increase of the reinforcement depth of foundation soil when the energy level of DCR equals 8000 kN·m. In case of the rammer height-diameter ratio between 0.3 and 0.5, the ramming energy is fully used in order to form composite foundation with even bearing capacity. The conclusions can be used as reference for comparison and selection of construction parameters of DCR.