Earthquake intensity measure (IM) selection is crucial for developing probabilistic seismic demand models (PSDMs). This study explored the optimal IMs that can be utilized in PSDMs for concrete-faced rockfill dams (CFRDs). A two-dimensional nonlinear dynamic analysis of a CFRD was performed to assess its response to earthquake ground motion. A numerical model of CFRD was developed using the commercial software LS-DYNA with an advanced hysteretic soil model. A total of 20 earthquake IMs were selected for regression analysis. The regression analysis was performed between IMs and the damage index (DI). The IMs were evaluated through a selection process based on the goodness of fit as well as their efficiency, practicality, and proficiency. Accordingly, a range of optimal IMs was determined. The results indicated that effective design acceleration (EDA) is the best earthquake IM correlating with the seismic response of dam settlement and can be considered the optimal IM, whereas peak ground displacement (PGD), ratio of peak ground velocity to peak ground acceleration (PGV/PGA), and predominant period (Tp) are the less efficient. The fragility curves and surfaces were developed employing both scalar and vector IMs for CFRD.