Abstract: In the existing seismic design methods the subgrades are all assumed to be rigid, and the effect of soil nonlinearity on foundation and superstructure is ignored. For applying soil nonlinearity to earthquake-resistant design and engineering practice, finite element method is adopted and the simulation of soil constitutional relationship is realized through choosing the Davidenkov soil model with proper parameters and using the restarting method in ANSYS. In succession, the soil nonlinearity and contact boundary nonlinearity are fully considered through the ANSYS procedure, then the dynamic reaction for the superstructure with rigid foundation is compared with that with nonlinear soil foundation, and the variation of the structural dynamic reaction at different heights is studied. At the same time, the dynamic properties of the soil-structure-dynamic-interaction (SSDI) system about the displacement, velocity and acceleration response of different soil basements are studied. A conclusion is drawn that the finite element method is very practicable based on comparison with the existing test results, and the results agree with the actual working mechanism of SSDI. It will provide theoretical basis for the engineering practice.