Liquid‐containing storage tanks are important structures in industrial complexes. Because earthquake damages to liquid storage tanks can cause structural collapse, fires, and hazardous material leaks, there have been continuous efforts to mitigate earthquake damages using seismic fragility analysis. In this regard, this study focuses on the seismic responses and fragility of liquid storage tanks. First, the characteristics of earthquake ground motions are a critical factor influencing the seismic fragility of structures; thus, this study employs real earthquake records observed in the target area, southeastern Korea, with the earthquake characteristics estimated based on the ratio of peak ground acceleration to peak ground velocity. When a liquid storage tank oscillates during an earthquake, additional forces can impact the tank wall owing to hydrodynamic pressures. Therefore, this study presents a sophisticated finite element (FE) model that reflects the hydrodynamic effect of an oscillating liquid. Another advantage of such an FE model is that detailed structural responses of the entire wall shells can be estimated; this is not possible in simplified lumped mass or surrogate models. Lastly, probabilistic seismic demand models are derived for three critical limit states: elastic buckling, elephant’s foot buckling, and steel yielding. Using the real earthquake ground motion records, constructed FE model, and limit states, a seismic fragility analysis is performed for a typical anchored steel liquid storage tank in Korea. In addition, for comparison purposes, a ring‐stiffened model is investigated to derive a seismic fragility curve. The results of the seismic fragility assessment show that elastic buckling is the most vulnerable damage state. In contrast, elephant’s foot buckling and steel yielding indicate relatively severe damage levels. Furthermore, it is observed that ring stiffeners decrease the elastic buckling damage, although there is no practical effect on elephant’s foot buckling and steel yielding in all ground motion intensities.