An anisotropic yield surface is used to characterize behavior of rocks and soils in the nonlinear regime. Expressions for the stress rate tensor and the rate of change of plastic volume in terms of the strain rate tensor are obtained by means of the associated flow rule. The model leads to a theoretical expression for the amount of dilatancy in terms of common material properties. This theoretical approach is valid for unloading as well as loading behavior and provides a more realistic description of unloading behavior than the isotropic hardening models currently in use.