This article presents a two-dimensional spectral finite element formulation for dynamic analysis of concrete gravity dams. Finite element method (FEM) is the one of the most extensively used analysis tools for solving problems of dynamic analysis of structures. However, it needs extensive computational resources and time for large structures, leading to the development of alternate computationally efficient modeling techniques over the past few decades. Some of these techniques are broadly termed as “Spectral Finite Element Methods” (SFEMs). Frequency domain-based SFEM (FDSFEM) and time domain-based SFEM (TDSFEM) are the most commonly used SFEMs found in the literature. This article provides a brief review of these methods identifying their key advantages and disadvantages; and explores the feasibility of applying such methods in the dynamic analysis of concrete gravity dams. Here, the TDSFEM has been used to perform the dynamic time history analysis of a concrete gravity dam due to its relative advantages over FDSFEM, which is challenging for irregular geometry and finite domain. Sensitivity analysis and convergence studies have been performed using 4-noded and 9-noded elements. The foundation of the dam has been modeled using two-dimensional infinite elements in both FEM and TDSFEM analysis, which is a novel application in the case of TDSFEM. This article quantifies the computational efficiency of TDSFEM over the conventional FEM by comparing the computation time in both methods and thus emphasizes the applicability of TDSFEM in dynamic analysis, especially in case of complex geometries and large two-dimensional structures (like concrete gravity dam). The results demonstrate the computational efficiency of TDSFEM over FEM when higher order elements are considered. Modal analysis and time history analysis results point that the use of higher order elements of TDSFEM can be a viable alternative to the use of the conventional FEM leading to significant saving in computational time with reasonable accuracy for dynamic analysis of large structures like concrete gravity dams.