The seismic site response analysis requires the dynamic soil properties (i.e., the modulus and damping). While it is well understood that the shear modulus and damping ratio are nonlinearly shear-strain dependent, the knowledge on the constrained modulus and damping ratio of compressional waves is still very limited due to lack of laboratory testing equipment. This study aims to simulate cyclic tests of constrained compression for granular specimens by discrete element method (DEM) to understand the dynamic soil properties of compressional waves, i.e., the nonlinearity in constrained modulus and damping ratio with the compression strain. The evolution in microstructure of granular specimens is revealed to provide micromechanical interpretations for the compressional soil nonlinearity. The results show that the dependency of constrained modulus on compression strain is different in compression and extension stages, and the modulus reduction is only observed in the extension path. The damping ratio of samples under cyclic constrained compression is smaller than that of cyclic shear. The nonlinear soil behavior is more obvious at lower confining pressure and for dense sample. The nonlinearity of constrained modulus depends on the coordination number, contact normal force and fabric anisotropy, while the associated damping ratio is only related to fabric anisotropy.