Liquefaction induced damage to the built environment is one of the major causes of damage in an earthquake. Since Niigata earthquake in 1964, it has been popularly recognized that the liquefaction induced ground failures caused severe damage in various forms such as sand boiling, ground settlement, lateral spreading, landslide, etc. Since then, understanding the mechanism of liquefaction phenomena became very important to take measures against the liquefaction induced ground failures. To understand the mechanism of liquefaction, it is important to consider the soil as an assemblage of particles. A continuum approach may fail to explain some of the phenomena associated with liquefaction. Discrete approach, such as distinct/discrete element method (DEM), is an effective method that can simulate the mechanism of liquefaction and associated phenomena well at the microscopic level. In this study, a new three-dimensional DEM model is developed to study the liquefaction and its associated phenomena. The hollow cylindrical torsion test under undrained condition, which replicates the ground condition before and during the earthquake well, is simulated using the newly developed model. A vertical strip from the hollow cylindrical specimen is considered in the study and the boundaries in the tangential direction are numerically connected to simulate the continuity in tangential direction. The liquefaction study is carried out by strain control shearing at the top while keeping the bottom plate fixed. The cyclic mobility, which is observed in saturated sands when subjected to cyclic shearing, is predicted by the proposed model. The effect of particle rotation on the development of dynamic pore water pressure is also investigated using the model. Also, sand boiling is simulated using the proposed model.