Most part of Iran is arid and semi-arid; thus in most parts of the region, groundwater is the only source of water. This research presents a method based on a spatial multi-criterion evaluation (SMCE) for designing possible sites of underground dams and ranks them according to their suitability. The method was tested for siting underground dams in the Alborz Province, Iran. At first, screening algorithm was applied using exclusionary criteria, and thirty-one potential areas were recognized in the study area. In the next step, a suitable gorge or valley was recognized using the combination of basic maps and extensive field surveys (long axis of tank level) in each potential area. Subsequently, the analytical hierarchy process was used as a powerful tool for decision-making in the SMCE in order to evaluate different criteria for underground dam sites. SMCE techniques were then applied to combine the criteria, and obtain a suitability map in the study area. These sites were then compared and ranked according to their main criteria such as water, storage, axis and socio-economics. All these criteria were assessed through geographical information system modelling. This method shows passable results and could be used for site selection of underground dams in other regions of Iran.