Abstract. Retaining walls are important geotechnical structures that are often used in soil slopes and trenches to bring ground surface at appropriate level for the construction of roads, highways and buildings. It is common practice to assume that the soil behind a retaining structure is either fully saturated or completely dry. However, for the case the soil is partially saturated, mechanical behaviour of the soil above the water table is different than that of the dry soil. Thus, it is necessary to investigate the effect of the variations of degree of saturation on lateral pressure behind retaining walls. In this research, the seismic behaviour of unsaturated soils behind a retaining structure is analysed. A finite difference code was employed to conduct the necessary analyses and a series of equivalent linear analyses is performed to reveal the effect of the degree of saturation on the general response of the retaining structures. The required functions for unsaturated zone were defined and implemented in the code. For this purpose, a soil water retention function was employed and the soil shear modulus is assumed to vary with the mean effective stress for both saturated and unsaturated zones which naturally introduces the required hydro-mechanical coupling in unsaturated and saturated zone. The results of the analyses compared to the conventional methods which does not include the unsaturated mechanical properties, indicate that in the unsaturated state, the increase in the effective stress, and hence, the shear modulus considerably affects the seismic forces on the retaining wall.