The analysis of the interaction between a circular tunnel lining and the surrounding saturated poroelastic soil is presented by use of the exact theory for the treatment of the lining. The method of analysis is performed by Laplace Transforms of the governing equations with respect to time and by numerical inversions of them. A parametric study is carried out to investigate the effects of the elastic properties of both the lining and the soil, the thickness of the lining, and the magnitude of applied initial stress states of the soil upon the behaviour of the lining. The comparison between the exact theory due to the Authors and the shell theory for the treatment of the lining is made by numerical results and graphical representations.