A fully coupled dynamic computer code in FORTRAN-90 is developed to predict the liquefaction potential of a semi-infinite saturated sandy layer. The saturated soil system is modeled as a two-phase material based on the Biot’s theory for porous media with u–P formulation to determine the responses of pore fluid and soil skeleton. The variational principle is applied to the field equations of fluid flow in a fully saturated porous elastic continuum, and the finite element method is used to numerically solve the resulting continuity equation and equilibrium equation. The mathematical advantage of the coupled finite element analysis is that the excess pore pressure (EPP) and displacement can be evaluated simultaneously without using any empirical relationship. Generalized Newmark-beta method is employed for integration in time. The soil behavior is modeled by Pastor–Zienkiewicz Mark III to describe the inelastic behavior of soils under isotropic cyclic loadings. The effect of the material non-linearity of the soil grain on liquefaction response is investigated by conducting parametric study. The accumulation of pore water pressure and the reduction of mean effective stress are simulated well. It has been observed that soil properties like permeability and shear modulus have significant effect on liquefaction analysis.